Cargo theft has been a challenge in the marine industry for almost as long as shipping has existed. However, the rise of digitalization combined with new forms of fraud has created a multilayered risk for companies transporting goods worldwide.
The issue has underscored the need for better security, cooperation with law enforcement, and thoughtful risk mitigation strategies.
“The biggest challenge, I think, right now is cargo theft,” said Ronnie Adcock (pictured), global practice leader for the marine business at Sedgwick, which maintains one of the largest and most experienced marine and transportation claims operations in the insurance industry.
Adcock was appointed last month to head Sedgwick’s expansion of its global offerings to provide comprehensive, specialist services to the marine sector.
Speaking to Insurance Business, Adcock emphasized the need for insureds to step up security and risk mitigation measures as global cargo theft becomes more complex.
“We rely on law enforcement to help recover them and determine who’s responsible. Of course, the thief is at fault, but poor security often makes it easy for them,” he said.
Adcock said that when businesses face real consequences for their negligence, they are more likely to invest in better protection measures for their cargo. This benefits not only the businesses themselves but also the broader supply chain, reducing the overall incidence of theft.
“Our job, representing both the cargo owners and their insurers, is to investigate who’s at fault so we can hold them accountable,” Adcock continued. “It’s more than just identifying an empty spot where the container was - it’s about digging deeper. Was it an inside job? Was it organized crime? Or did security fail to protect the cargo?”
While security failures create easy opportunities for thieves and organized crime groups, technology has also dramatically increased their capability for cargo theft. The digitalization of supply chain management has made it easier for malicious actors to forge documents and divert cargo.
This organized form of fraud, where stolen cargo is rerouted to the wrong hands with the help of forged paperwork, has been growing worldwide. Adcock acknowledged that technology-enabled fraud has another layer of challenge for insurance companies and logistics providers attempting to recover stolen goods.
“It’s easier than ever to forge documents and reroute cargo. Traditional theft is still a problem—organized crime just picks up the containers and takes off,” he said. “While we used to rely on trackers to prevent theft, thieves have figured out how to disarm them.”
The geographical spread of cargo theft is equally concerning. While North America, specifically the US and Canada, is notorious for high rates of cargo theft, Mexico and South America are also significant hot spots, according to the Sedgwick leader.
Collaboration with law enforcement is essential to the fight against cargo theft, but this is easier said than done.
Adcock cited a “lack of interest” in law enforcement to investigate cargo theft cases and recover stolen goods. Since many stolen shipments are insured, authorities may deprioritize these crimes, focusing their attention on other pressing issues.
“Our main goal is to set up processes that reduce the risk, but recovering stolen cargo remains a huge challenge, and it rarely happens,” said Adcock.
Given this lack of urgency from law enforcement, Sedgwick has had to find creative ways to work around these barriers. The organization has brought in theft investigators with backgrounds in law enforcement to leverage their relationships and expertise in navigating the bureaucratic hurdles.
Finally, when it comes to cargo theft mitigation, sometimes the most practical advice is the best. “We advise clients not to advertise what’s inside the boxes,” said Adcock.
“Then (when theft occurs), we investigate further to determine where the blame lies, whether it’s on the thief or the warehouse, which often has insurance coverage. We also have cargo investigators with law enforcement backgrounds to help with these cases.”
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