Loss Prevention Saves a Bundle . . . and a Client
William K. McCardell, Vice President of the U.S. Fidelity & Guaranty Company
BALTIMORE . . . Cargo theft is a growing problem that has industry, government and insurance people increasingly worried.
During 1976 over $20 million was stolen in 450 separate incidents, according to a random survey by Babaco Alarm Systems, Inc. Average losses were approximately $46,000 per load.
Included in these statistics were thirty-two thefts involving $100,000 or more, enough to make a claim department manager cry.
The need to mobilize against this serious problem was the subject of Executive Order 11836, in which the President of the United States said, "Theft of cargo has emerged during this decade as a serious threat to the reliability, efficiency and integrity of the Nation's commerce. The total cost of theft-related cargo losses from our Nation's transportation system is now estimated to be in excess of $1 billion annually. These losses seriously erode industry profits, result in higher prices for consumer goods, and provide support for unlawful activities."
At that time, the President charged government and industry with the responsibility of organizing to prevent cargo theft.
Various government groups were appointed to work on solutions of the problem, including the Secretary of Transportation, the Attorney General and the Secretary of the Treasury, and government transportation agencies, such as the Interstate Commerce Commission, Civil Aeronautics Board and the Federal Maritime Commission.
Industry, likewise, has organized to the government's challenge "to do something." They have created the Transportation Cargo Security Council, a truly all-industry council which encompasses airlines, truckers, automobile manufacturers, merchants, railroads, shippers and insurance companies.
The insurance industry in particular has long recognized the importance of loss prevention. Both the Ocean Marine segment of the business and the Inland Marine underwriters have cargo loss prevention committees which are among the most active in their organizations.
In addition, individual companies have stepped up educational programs for their engineering people and are developing loss prevention programs tailor-made to fit each risk.
As a result of their exploration of the cargo theft loss problem, insurance companies have made several general recommendations for any concern involved in cargo transport.
1) Obtain the support of top management, whether it is a shipper or a carrier. There is a complete agreement that, unless top management is in full sympathy with loss prevention and is willing to spend the money to support the programs, there will only be token compliance and, therefore, poor results.
2) For any risk of sufficient size, employ a trained security director who reports directly to top management with power to enforce compliance with the rules and regulations.
3) Since the single biggest source of theft loss is attributable, directly or indirectly, to employees, carefully screen all employees.
1) chain link fences around terminals,
2) lighting of terminal areas,
3) proper location of terminal tower dispatcher in view of entrance and exit gates,
4) I.D. cards for all employees,
5) king pin locks for all trailers,
6) tail-to-tail parking of loaded trailers at terminals,
7) strict control of tractor keys by dispatcher personnel,
8) planned delivery routes, and
9) identification markings on trailer tops so that they can be easily spotted from the air.
1) loaded trailers travel in convoy (at least two trucks) between terminals,
2) the identifying number on the tractor trailer is changed once the trailer is loaded and ready for departure,
3) delivery to terminals is done only during daylight hours, and
4) a telephone call check-in is being done by drivers when making city deliveries.
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