Third Quarter 2012 U.S.

Cargo Theft Report

November, 2012

Overview

.......................................................................................... 3

U.S. Cargo Theft Analysis

5 U.S. Cargo Theft by Quarter and Month .................................. U.S. Cargo Theft by State ........................................................ 6 8 U.S. Cargo Theft by Day of Week ............................................ U.S. Cargo Theft by Location Type ........................................... 9 U.S. Cargo Theft by Commodity Type ....................................... 10 U.S. Cargo Theft Loss Value .................................................... 11

Conclusion

...................................................................................... 12

Verisk Crime Analytics

November, 2012

About this Report

CargoNet has aggregated and analyzed nearly every U.S. cargo theft incident reported since January, 2009. This data-collection effort has resulted in an expanding cargo theft database that contains a growing number of cargo theft incident reports including a high level of relevant detail. This Q3 2012 United States Cargo Theft Report provides a snapshot of American cargo theft during the time period between July 1, 2012, and September 30, 2012. You will find information on stolen commodity type, theft incident location and date, cargo origin/destination, and loss value, as well as additional analysis generated from 286 specific data fields. The information in this report can be used to measure supply chain security risks, especially with regards to ground transportation. The report assists transportation professionals in mitigating risk by pinpointing areas of vulnerability surrounding the movement of goods, mapping patterns of theft against the flow of goods, and forecasting future cargo theft challenges. Although CargoNet has collected significant amounts of international cargo theft data, this report only focuses on theft data for incidents occurring within the 50 states and the District of Columbia.

About CargoNet
Formed in 2009 by Verisk Analytics and the NICB, CargoNet helps prevent cargo theft and increases recovery rates through secure and controlled information sharing among theft victims, their business partners, and law enforcement. Crime analysts and subject-matter experts manage CargoNets database and information-sharing system. CargoNet applies an integrated, layered approach that analyzes cargo crime from multiple perspectives and includes: Integrated databases Cargo recovery network Task force and investigations support Tractor/trailer theft deterrence program Secondary-market monitoring and interdictions Crime trend analysis and loss control services Training and education

Availability of Additional Data

The results within this report were generated directly from the CargoNet database. Cargo theft reports can be accessed in real-time by CargoNet members and the law enforcement community. For more information about CargoNet, please visit www.cargonet.com, send e-mail to info@cargonet.com, or call 1-888-595-CNET (2638).

Verisk Crime Analytics

November, 2012

Purpose and Uses of the Q3 2012 United States Cargo Theft Report
The Third Quarter 2012 United States Cargo Theft Report presents findings from CargoNets analysis of cargo theft incidents reported during this time period and discusses the potential impact of cargo crime on U.S. businesses. The research found within this report addresses four fundamental topics with regards to Q3 2012 cargo theft incidents: 1. 2. 3. 4. What commodity categories were impacted most by cargo theft? Where did U.S. cargo theft incidents occur? When did U.S. cargo theft incidents occur? What specific locations were most frequently targeted for U.S. cargo theft?

Highlights
There was a 9% increase in reported Q3 cargo theft incidents in 2012 (246) over what was reported in Q3 of 2011 (225). In California, there was a 19% increase in reported Q3 cargo theft incidents in 2012 (75) over what was reported in Q3 of 2011 (63). In Q3 2012, the Top 10 list of states with the highest number of reported cargo theft incidents made up 85% of the total reported cargo theft incidents. On the line graph that charts reported cargo theft by weekday, the typical V shape indicating a weekend trend in cargo theft was less pronounced than during previous periods. Prepared food and beverage products were the most stolen commodity in Q3 2012. Food, base metals, electronics, apparel, and plastic and rubber products represented 69% of all commodity types reported stolen in Q3 2012, versus 63% in Q2 2012.

Cargo theft incidents that occurred from July 1 - September 30, 2012
* Please note: the Q3 2012 figures in the report reflect the number of Q3 thefts reported as of September 30, 2012. Throughout the fourth quarter of 2012, additional incidents that occurred in Q3 2012 will continue to be reported. The final number of Q3 2012 incidents was 246. However, for the purpose of comparison with Q3 2012, you will see unadjusted Q3 2011 numbers used throughout this report.

Verisk Crime Analytics

November, 2012

U.S. Cargo Theft by Quarter and Month

Figure 1 Figure 2

Cargo Theft by Quarter

350
Reported Theft Incidents

2011

2012 273
Reported Theft Incidents

Cargo Theft by Month

140
2011 338 117 108 265 80 62 66 92 340 303 102 72 49 295 84 99 80 312 311 81 86 73 52 70 82 89 76 75 2012 335

300 250 200 150 100 50 0

196

302 251
163

205

225

246

120 100 80 60 40 20 0

91 89

79

Q1

Q2

Q3

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

As of September 30, 2012, 246 cargo theft incidents were reported to CargoNet as having occurred in Q3 (July 1, 2012 September 30, 2012) - shown in Figure 1. By comparing the first three quarters of 2011 to the first three quarters of 2012 (Figure 1), you will notice a 28% increase in the number of reported cargo theft incidents. As of September 30, 2012, there was an average of 3.0 reported cargo theft incidents per day in 2012, with an average of 2.7 reported incidents per day in Q3 alone. By analyzing the first nine months of the year (Figure 2), you will notice a slight decrease in reported cargo thefts during the summer months. This can be attributed to the annual decline in shipping during end of Q2 and beginning of Q3. We are expecting to see an increase in reported incidents in Q4 due to the annual holiday shipping increase. Overall, we regard the Q1-Q3 numbers as being only part of the whole 2012 story. What looks like a significant increase in cargo theft this year is most likely to be due to an increase in the number of cargo theft incidents being reported.

Verisk Crime Analytics

November, 2012

U.S. Cargo Theft by State

Figure 3

Cargo Theft by State (Top 10)

80 70
Reported Theft Incidents

Q3 2011 75 63 52

Q3 2012

60 50 40 30 20 10 0 CA TX FL
13 27 27 27 20 24 17 7 14 7 9 22 7 2 7 4 6

GA

NJ

PA

TN

IL

MI

VA

Of the top ten states (Figure 3) where cargo theft incidents were reported this quarter, six showed increases when one compares numbers from Q3 2011 to Q3 2012. California, Georgia, Pennsylvania, Tennessee, Michigan and Virginia showed increases of 19%, 54%, 100%, 29%, 250%, and 50%, respectively. Florida, New Jersey, and Illinois showed decreases in reported cargo theft incidents this quarter when compared with Q3 2011. Florida and Illinois in particular experienced significant decreases -- 48% and 68%, respectively.

Verisk Crime Analytics

November, 2012

U.S. Cargo Theft by State

Compared to the third quarter of 2011, two states fell out of the top 10 rankings: Utah fell from 9th place to 15th place, and Indiana dropped from 10th place to 17th place. Michigan moved into 9th place and Virginia moved into 10th place in Q3 2012.
Table 1

Rank Q3 2012 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 7
Verisk Crime Analytics

Cargo Theft Incidents State CA TX FL GA NJ PA TN IL MI VA SC NC OH MS 9 UT MN 10 IN MD MO AL Q3 2012 75 27 27 20 17 14 9 7 7 6 4 4 4 3 3 3 2 2 2 1 Q3 2011 63 27 52 13 24 7 7 22 2 4 1 1 3 0 6 0 6 1 0 1 % Change 19% 0% - 48% 54% - 29% 100% 29% - 68% 250% 50% 300% 300% 33% N/A - 50% N/A - 67% 100% N/A 0% 1 3 2 6 4 7 8 5

Q3 2011

November, 2012

U.S. Cargo Theft by Day of Week

Figure 4

Cargo Theft by Day of Week

Q3 2011 Q3 2012 55 49 44 43 46 34 28 28 24 26 21 14 27 32

60 50
Reported Theft Incidents

40 30 20 10 0 Sunday Monday Tuesday

Wednesday

Thursday

Friday

Saturday

In Figure 4, reported cargo theft incidents no longer show a V pattern as they have in previous reports. The reason why the V pattern is less prevalent is because the quality and timeliness of cargo theft incident reporting continues to improve. Sunday, Friday, and Saturday continue to be the days when the most theft incidents are reported.

Verisk Crime Analytics

November, 2012

U.S. Cargo Theft by Location

Figure 5

Cargo Theft by Location Type

Q3 2011 50 45
Reported Theft Incidents

Q3 2012

88

40 35 30 25 20 15 10 5 0 19 52 50 39 24 29 16 21 9 17 6 13 18 6 7 6 6 2 2 1 1 0 1 0 38

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The cargo theft trend by location type in Q3 2012 significantly differs from what was reported at the same time last year. The increase in location types such as warehouse/distribution centers, parking lots and truck stops is not necessarily because more cargo theft incidents are occurring in these locations, but because the quality of the information being submitted into incident reports has improved. CargoNet collected 85% or 208 of the total of 246 possible theft location types in Q3 2012 versus 61% of possible location types for what was reported in Q3 2011. The top three cargo theft location types in Q3 2012 (warehouse/dc, parking lot, truck stop) represent 57% of all cargo theft locations reported in this quarter.

Verisk Crime Analytics

Ca

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November, 2012

U.S. Cargo Theft by Commodity

Figure 6

Q3 2012 U.S. Cargo Theft Frequency by Commodity Type

Unknown - 2%

Other Commodity Commodity Theft Q3 2012

Mixed Load Miscellaneous Toys/Games Aircraft/Vessel Wood/Pulp/Paper Minerals Stone/Cement/Ceramic Arms/Ammunition 12 8 4 4 4 2 1 1

Personal Care / Beauty - 2% Machinery - 2% Pharmaceuticals - 3% Life Sciences - 3% Furniture - 4%

Other 15%

Food / Beverage 23%

Base Metals 15%

Plastics / Rubber - 8%

Apparel / Accessories 8%

Electronics 15%

Table 2 shows the statistics surrounding reported cargo theft incidents in Q3 2012 by top 10 commodities. Food/beverage ranked first with 56 reported theft incidents or 23%, while base metals and electronics tied for second with 36 reported theft incidents or 15% each. The only commodity out of the top 10 to significantly decrease between Q3 2011 and Q3 2012 was electronics, which decreased by 23%. Apparel and accessories, plastics and rubber products, base metals, and furniture showed significant increases between Q3 2011 and Q3 2012. These commodities had increases of 31%, 54%, 80%, and 175% respectively.
Table 2

Cargo Theft by Top 10 Commodities Commodity Food/Beverage Base Metals Electronics Apparel/Accessories Plastics/Rubber Furniture Life Sciences Pharmaceuticals Machinery Personal Care/Beauty Other Unknown Theft Q3 2012 56 36 36 21 20 11 7 7 6 5 36 5 Theft Q3 2011 51 20 47 16 13 4 6 9 9 8 36 15
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10

November, 2012

U.S. Cargo Theft Loss Value by Commodity

Figure 7

Percentage of Cargo Theft by Loss Value

0.45 0.4
Percentage of Theft Incidents

Q3 2011

Q3 2012 41% 39%

0.35 0.3 0.25 0.2 0.15 0.1 0.05 0

1% 1% 21% 13% 14% 16% 8% 3% 24% 19%

$1M+

$100K - $1M

$50K - $100K

$10K - $50K

$0 - $10K

Unknown

Figure 7 represents a breakdown of cargo theft incidents in Q3 2011 and Q3 2012 by specific loss value ranges. By looking at this figure, you will notice that reported cargo theft incidents by loss value between Q3 2011 and Q3 2012 has stayed consistent. Twenty four percent of the 246 reported theft incidents in Q3 2012 had a loss value range between $100,000 and $1,000,000, versus 21% in Q3 2011. About 15% of reported cargo theft incidents were in the loss value range of $50,000 to $100,000 in Q3 2012, up from 13% in Q3 2011. Loss values in the range of $10,000 to $50,000 increased to 19%. In Q3 2012, reported theft incidents with smaller values, such as the $0 to $10,000 range, accounted for 3% of total reported Q3 loss. Cargo theft by loss value range as reported in Q3 2011 stayed consistent through Q3 2012.

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Verisk Crime Analytics

November, 2012

Summary
The following are characteristics of cargo theft occurring from July 1, 2012 to September 30, 2012: 1. As of September 30, 2012, reported cargo theft incidents increased by 28% as compared with the first nine months of 2011. 2. There was a significant decrease in the number of theft incidents reported in Florida, New Jersey, and Illinois in Q3 2012 than what were reported in Q3 2011. 3. There was a less evident weekend trend in Q3 2012; however, Friday had the most incidents reported in both Q3 2011 and Q3 2012. 4. Food and beverages, base metals, electronics, apparel and accessories, and plastics and rubber products made up the top five stolen commodity types in Q3 2012.

Closing Statement
CargoNet encourages transportation, manufacturing, and retail professionals to continue to provide information about cargo theft incidents as quickly as possible to law enforcement and CargoNet. Information sharing needs to be front and center within all industries in order to accurately define, measure, and analyze cargo theft incidents. Better reporting and subsequent analysis enables the delivery and implementation of viable solutions that can help prevent cargo theft and related supply-chain disruptions and improve the opportunity for recovery.

To Report a Theft,

Call 1-888-595-CNET (2638)

Verisk Crime Analytics

12

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Verisk Crime Analytics, Inc., 2012. Verisk Analytics, the Verisk Analytics logo are registered trademarks and Verisk is a trademark of Insurance Services Office, Inc. CargoNet, the CargoNet logo are registered trademarks of Verisk Crime Analytics, Inc.