The Insurance Review - September 2009
PROTECT YOUR LIVELIHOOD
By Roland L. Enz - President, California Plus Insurance
Cargo thefts are estimated to be as high as $50 billion a year. The cost of theft and burglary not only includes the payment of the initial claim, if insured, but includes administrative costs, investigation and lost income and revenue. On top of that, there has been an increase in needed law enforcement and security that now has to be devoted to the problem.
This month, I want to continue my campaign on the critical part that you, the individual trucker, has in the current increase in cargo theft and burglaries. This is an epidemic that is following the country’s economic slow-down. The problem is worldwide, but our time is better spent in the discussion that directly affects us here in the United States.
As I look at the theft claims that our agency is directly involved in, I have to think that this is only a micro view of this nation’s total claims picture. Each theft or burglary claim, for the most part, could have been prevented with a little common sense. So what does that tell me – the industry in itself is responsible, to some degree, of the magnitude of this epidemic. Whether you (the trucker) are an unwilling participant or, in many instances, a willing participant, in either case, you are a big part of the problem, and turning a blind eye to these behaviors only makes things worse.
If you are an owner operator, you have a direct stake in the problems created by theft and burglary. I have said this time and time again – as I travel throughout California I constantly see trucks that have been left unattended, loaded, parked on the side of streets and roads, and in shopping center parking lots and deserted commercial areas. I realize that there is a problem in finding secure parking, but you still have the responsibility of protecting your equipment and the cargo that you are hauling. I am convinced that each theft has a correlating factor with the owner operator or driver of the load that is stolen – either known or unknown. Ignorance or a blind eye is no excuse, and the responsibility lies directly with you.
Protect your equipment and the freight that you are hauling. Oftentimes, the thief has a relationship with you through dispatch, gossip, observation, an acquaintance, or in many situations, direct involvement. The majority of all losses occur within the first 200 miles of transport. How many times do I see loaded trailers, left unattended, on the side of the road? Not only are high-value items being stolen, but virtually every commodity group has increased significantly since 2008. And here is a staggering fact: warehouse burglaries have increased 100% over last year!
A theft can occur anywhere, but most of them happen in and around the larger cities of this country. The FBI estimates that 75% of all cargo losses occur in New York & New Jersey, Miami and Southern California. We, as an agency, have more losses out of the city of Long Beach than any other geographic area (second to Long Beach is the immediate area near the Mexican border).
In the past, cargo theft has been a relatively benign crime, making participation, for those involved, safer than those that participate in dangerous crimes such as drug trafficking and/or sales. Recently, the reauthorized Patriot Act has increased federal prison time to three years for anyone convicted of stealing cargo with a value of less than $1,000 and up to 15 years for anyone convicted of thefts totaling more than $1,000.
Since the economy has slowed, the trucking industry has shrunk by 13% over the past year. 75,000 jobs have been lost since June of 2008. In January of 2007 the industry employed 1.45 million people. With job losses of this magnitude, there are many idle hands and minds that have knowledge of the industry, looking to continue to put bread on the table through an industry that they know very well. It is imperative that you, as a trucker, participate in the policing of the industry that you earn your living in.
There are many channels that you can participate in if you are privy to or have some knowledge of any crime or potential crime. Contact the local police, the CHP or the FBI. The Los Angeles County Sheriff’s Department has a unit devoted entirely to cargo theft called Cargo CATs (Criminal Apprehension Team). For more details about this program, go to www.cargocats.us or call (310) 603-3137.
In the event of a theft or loss, could you afford to have any lost income? Could you survive any down time at all? Everyone that is surviving in this tight economic environment is virtually running on borrowed time and any loss of revenue could be disastrous. Most cargo losses also include the theft of the tractor trailer. Whether equipment shows up or not, you are out of business and out of
revenue for that period of time. If you are relying on your insurance coverage to take care of that little problem, guess again.
If you have any insurance claim, no matter how good your coverage or agent is, the final outcome is never pleasant. Your out-of-pocket expenses will be considerable. Can you survive? Even with a settlement from the insurance company, you will now be strapped with a claim on your record. Whether at fault or not, it is still a claim that will follow you when you renew your insurance. At that time, you will feel the additional pain of increased insurance costs. So protect your livelihood by protecting your freight. If you have any comments or questions, I can be reached through California Plus Insurance Service in Modesto, CA at 1-800-699-7101.