Soaring Cargo Thefts Exceed $700 Million Amidst Pandemic-Driven Supply Chain Crises

Soaring Cargo Thefts Exceed $700 Million Amidst Pandemic-Driven Supply Chain Crises

As the U.S. continues to grapple with the aftermath of the Covid-19 pandemic, the surge in cargo theft has escalated, with criminals exploiting supply shortages to target high-demand goods. According to a recent report from Overhaul Risk Advisory Services LLC, the total value of stolen goods reached approximately $694 million in 2023, with each theft averaging a loss of $586,917. This marks a significant increase from the previous year, highlighting a growing trend in organized crime targeting the logistics sector.

In 2023 alone, there were 1,183 instances of cargo theft, and the average loss per incident surged by 67% compared to $351,556 in 2022. Experts predict this trend will rise by another 35% in 2024. The driving force behind this spike is the desperation of businesses, impacted by supply constraints, to procure in-demand products at any cost, often turning a blind eye to the origins of these goods.

Barry Conlon, the CEO and founder of Overhaul, who has nearly three decades of experience in the industry, noted a significant shift in the market dynamics since the pandemic. “The landscape has transformed dramatically,” Conlon observed. “Businesses are now more willing to acquire products from unknown sources online, lured by promises of items still in factory packaging. This change in purchasing behavior has fueled the rise in thefts, as demand continues to outstrip supply.”

Cargo thieves primarily target items that are easily resold, with electronics, pharmaceuticals, razor blades, and batteries being particularly vulnerable. Electronics remained the most stolen type of product for the third consecutive year, despite a slight decrease from 22% of all thefts to 20%. Meanwhile, thefts of food and beverages and home and garden supplies have seen the most significant increases.

The majority of these thefts are carried out by organized crime groups, who avoid violence to minimize law enforcement attention and ensure quick turnover of stolen goods. Conlon explained how straightforward it can be for thieves to steal a loaded truck, especially when drivers leave their vehicles idling at truck stops in hot climates to avoid the discomfort of returning to a sweltering vehicle.

The report also highlighted that while trucks are a primary target, warehouses are increasingly becoming hotspots for theft, with nearly a third of the incidents occurring there. To combat these issues, companies like CargoNet and Overhaul are employing advanced technologies to enhance the security of shipments and maintain a secure chain of custody for transported goods.

Overhaul’s innovative approaches have attracted substantial investment, with Edison Partners investing nearly $50 million into the company. “Our technology deters criminals and ensures constant monitoring of goods,” said Ryan Ziegler, a general partner at Edison Partners. He emphasized the importance of tracking high-value items like iPhones, which attract more attention than less valuable goods.

Despite these advancements in security and tracking, the underlying issue of supply shortages continues to exacerbate the problem. Conlon pointed out that the primary concern for many of their clients is not just the theft itself but the inability to replace stolen items, leading to customer disappointment and lost market share.

As the situation evolves, businesses and logistics companies must adapt to these challenges to protect their goods and maintain their competitive edge in a market still reeling from pandemic-related disruptions.

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