The Quest Newsletter is designed to provide critical information in the transportation industry. Avalon Risk Management is not responsible for the accuracy or reliability of information contained in articles. The reader/user assumes all risk in the use of such information.

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HOW YOUR CARGO IS BEING STOLEN What types of cargo theft are a threat and how likely they are to happen to you?

It is important to understand the different types of thefts. Sometimes the type of theft can even be indicative of who the thieves are and their motivation. FreightWatch International (FWI) 2015 First Quarter report revealed the breakdown of the theft event type. Here is a closer look:

Theft of Full Truckload - 80% of total thefts

The theft of a full truckload is the theft of all the goods in packaged together and may also include the theft of the trailer, truck, or container the goods were packaged in. This remains the most common type of theft. Theft of full truckload also accounts for 65% of the total theft for million-dollar-plus cargo.

This theft often occurs in unsecure parking areas like truck stops (21% of the time).

Pilferage - 12% of total thefts

Pilferage is the theft of a few pieces or a small quantity of a relatively large shipment. FWI reports that this theft type is utilized by organized cargo thieves and street-level criminals alike. Pilferage saw the largest increase in the first quarter up from 5% the previous quarter and from 8% from 2014 quarter one.

Facility Theft - 4% of total thefts

Facility Theft is the theft of goods from a warehouse or facility storing goods. Facility thefts require much more planning and reconnaissance. Based on data from FWI, thieves are looking for the more lucrative score. Facilities offer higher value and volume goods with high rewards. A burglar who invest time and research can reduce the risk of apprehension greatly.

The million-dollar-plus cargo theft amongst facilities is 29% whereas within the whole of thefts, facilities only account for 4%. This means that most Facility thefts will be a higher value.

The Quest Newsletter is designed to provide critical information in the transportation industry. Avalon Risk Management is not responsible for the accuracy or reliability of information contained in articles. The reader/user assumes all risk in the use of such information.

150 NORTHWEST POINT BLVD. • ELK GROVE VILLAGE , IL 60007 PHONE: ( 847 ) 700 -8100 • FAX : ( 847 ) 700 -8116 • WWW.AVALONRISK .COM

Fictitious Pickup - 3% of total thefts

Fictitious pickup is the theft of cargo by deception that includes using fake aliases set up for the purpose of the diverting or stealing cargo. This is the new age of cargo theft using cybercrime as a way to defraud shippers. The internet has made it easier to set up fake businesses or personas in the effort to develop a fictitious pick-up scheme.

Fictitious pickup saw a 1% decrease from the previous quarter and 2% from 2014 Quarter one.

Hijacking - 1% of total thefts

Hijacking is a theft where the goods are seized in transit after the vessel is forced to stop. A hijacking can often include the theft of the vessel and pose harm to workers. Domestic hijacking continues to be the least used form of theft. The perpetrator is often desperate and non-organized. The penalties of hijacking are also far more severe than other forms of theft.

It is important to note that while theft of full truckload accounts for the bulk of thefts there are many incidents where theft is not reported in these other areas. Pilferage tends to often happen internally where records of crime are hard to track. Fictitious pick-up is also often underreported due to the fact that the victim had neglected to vet the carrier or driver or had made the error while rushing the process trying to meet delivery date. Some companies deem that reporting theft can be harmful to their reputation and business.

Taking the proper security steps and loss prevention methods are essential to minimizing the threat of theft. FWI reported that 91% of the time, the cargo theft occurred in unsecured parking. However, the increase in loss value shows thieves are getting smarter and strategic by targeting loads that have higher value payoffs. It is still important to protect your business any way you can.

Avalon Risk Management provides cargo coverage solutions. Customized Cargo Insurance policies provide broad “All-Risk” coverage to protect the shipper’s goods in transit.

For additional information on Avalon’s Cargo Insurance Policies, contact marketing@avalonrisk.com or http://www.avalonrisk.com