The supply chain crisis' latest woe: Cargo theft that may last as long as the backlogs do

Dani Romero · Senior Reporter

Sat, Nov 13, 2021, 5:59 AM 4 min read

The worsening supply chain troubles are making stolen shipments an increasingly common problem that's affecting shoppers, already facing long delays and soaring prices. Cargo that finally makes its way out of backlogged ports on the West Coast is being aggressively targeted by criminals eyeing containers filled with electronics amid the chip shortage.

Meanwhile, on the East Coast, refrigerated trucks used to transport food have been a favorite target of thieves, according to reports.

“The old saying is freight at rest is freight as risk,” said Keith Lewis, Vice President of CargoNet, a Verisk business, which tracks thefts along the supply chain for companies, told Yahoo Finance Live on Friday.

“With the log jam at the port[s] and getting the containers out of there, getting them to stack yards, carrier yards, etc. the freight is sitting,” Lewis added.

Thieves made off with greater than $5 million value of products as a result of so-called supply-chain theft in California in the third quarter of 2021, according to CargoNet’s data.

Like the ports in Long Beach and Los Angeles, the Port of Savannah has grappled with a sustained rise in import volume in recent months.

One of the biggest issues is the lack of space to process containers, as clogged container yards prevent ships from unloading efficiently, leaving thieves the opportunity to do damage in those areas.

"There's container yards down there that bring in refrigerated containers from South America and those are being targeted," Lewis added.

'Optimal domain awareness'

Container ships wait off the coast of the congested ports of Los Angeles and Long Beach, in Long Beach, California, U.S., September 29, 2021. REUTERS/Mike Blake · (Mike Blake / reuters)

California topped the list of states most targeted by thieves, CargoNet data showed — followed by Texas and Florida. As much as $45 million in cargo thefts have been reported from January to September. In 2020, cargo thefts reached $68 million and in 2019 they hit $49 million, according to the analysis, with the pace of theft is expected to continue through 2022.

"We see this as going to continue for awhile," said Lewis. "Electronics, gaming, those types of things, peripheral devices for computers are going to be the trend for the future."

Recently, NBC 4 News Los Angeles reported that there are thousands of boxes strewn along the railroad tracks. They appeared to have fallen, or been thrown from cargo containers hauled by Union Pacific trains, according to the report.

Union Pacific (UNP) transports goods from the Los Angeles County Ports, where the massive backlog of cargo continues. "We are aware of the problem, and we are working with local law enforcement in Los Angeles to address the issue and stop the thefts," A spokesperson from the train operator told Yahoo Finance in an email.

For months, the Port of Long Beach has been ground zero for backlogged shipments unable to reach their final destination. "Electronic surveillance is carried out on land, on the water and below the water with a variety of cameras, radar, sonar and various threat assessment technologies," a port spokesperson told Yahoo Finance in a statement.

"In addition, the Port is continually upgrading and adapting its approach to security to ensure optimal domain awareness," the spokesperson added.

Although most of the nation’s major ports have seen their container volumes skyrocket during the past year, the most damage from thieves isn't actually ports or rail yards, CargoNet's Lewis explained.

"We're seeing is an uptick in pilferage is people stealing something just off the back of the truck, or somewhere in the middle of the truck," said Lewis.

Yet it's a challenge to track theft because shippers simply don't know where thieves could strike, especially when freight is sitting around idle.

"It's much more difficult to predict exactly what load they may target, which loads they're going to hit, what area they're going to work in that day or that weekend," Scott Cornell, a crime and theft specialist at insurance giant Travelers (TRV), told Yahoo Finance on Friday.

And the rising levels of theft for fleets and businesses mean that ultimately, it's consumers that will feel the impact this holiday season. Already, widespread shortages and rising prices are making the Thanksgiving to Christmas rush harder than usual.

"Anytime that you have a theft or you take away some of the inventory that's going to be out there, you're going to have a shortage on different items," Cornell said.

"There's going to be less to choose from. Fewer things on the shelves or fewer choices to make when you go out to shop this year," he added.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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