Mike Porcelli, chief of security for Western Digital Corp., is holding his breath.

Since June 1996, the Irvine, Calif., computer disk-drive manufacturer has lost freight worth an estimated $9.25 million in 20 separate incidents - from truckload hijackings to snatch-and-dash pilferings - and so far his cargo insurance deductibles haven't gone up.Instead, the cargo insurer ordered Western Digital to install a loss-control program.

Western Digital is not alone in its theft problems. The National Cargo Security Council in Alexandria, Va., estimates that $100 billion in cargo is stolen each year in the United States, and industry executives expect the problem will get worse.

Computers, components, microchips, electronic products and wearing apparel with globally sought-after brand names like Tommy Hilfiger, Nike, Reebok, Guess and Ralph Lauren are frequent targets.

This thirst among thieves for high-value cargo, and the huge appetite for underwriting the more mundane freight, has produced an almost schizophrenic insurance market.

Many high-value shippers and freight forwarders are facing stiff rates and new restrictions from a dwindling list of underwriters.

''We've seen increases of 50 percent to 200 percent for insuring these commodities,'' says Virginia Wolfe, assistant underwriter and claims manager for Trade Insurance Services, an insurance brokerage specializing in air freight forwarders and air couriers.


Insurers are either becoming super selective on underwriting theft-plagued high-tech freight or they're exiting the marketplace.

''We've been hit very hard,'' admits Rich DeSimone, senior vice president, Atlantic Mutual Cos. in New York, ''and we're writing (these commodities) on a case-by-case basis.''

Other shippers - those moving the less-enticing cargo - are demanding low rates and no deductibles.

And they are getting it.

''The overall market has been soft for the last 24 months because insurers have the capacity,'' said Carolyn Lucas, claims manager for Roanoke Brokerage Services of Long Beach, Calif.

Donna Zeller, claims unit manager for St. Paul Fire and Marine in Seattle, said it's ''hard to hang on to (the typical) cargo account because someone will come in with a lower rate. You can write a cargo account for years and not get hit or the losses are relatively small.''


Some shippers are asking for the moon. Risk managers are more knowledgeable and they ask for no deductibles and covers for esoteric exposures, Ms. Zeller said. Example: rejection insurance. This is when a shipper tries to get goods into a foreign country and the entire shipment is rejected ''on a whim.''

At the same time, she said, ''tech or anything designer'' - from clothing to coffee beans - are target commodities and are hard to underwrite today.

And high-value forwarders, already operating on thin profit margins, are feeling the squeeze.

''In the past, we had no deductibles on our open cargo insurance policy,'' said Jack Lutz, director of loss prevention for USF Seko Worldwide, an Elk Grove, Ill., air freight forwarder. ''But now for this highly visible freight, deductibles range anywhere from $250 to $5,000 per shipment.''

If there is a loss, Seko absorbs the deductible expense.

Yet even to secure coverage at a reasonable premium, Seko must agree to other stipulations. On high-value shipments, the forwarder may have to agree to make special pickups and deliveries rather than rely on the shippers' choice of cartage carriers.

Still, the small pickup and delivery vans that may contain three pallets of computer hard drives are easy marks for hijackers, concedes Mr. Lutz. In some cases the truck and its contents are both stolen.


To combat crime, the Seko loss-control executive has set up several procedures. Every station handling a high-value shipment is informed in advance so it can give the goods special handling. Cartage drivers cannot dawdle for any reason.

''They pick up the freight from the customer and go straight to the airport,'' insists Mr. Lutz. ''No stops in between for lunch, making phone calls to his dispatcher and dropping by the girlfriend's house.''

At Western Digital, Mr. Porcelli declines to name the insurer or spell out the new ''checks and balances,'' but loss-control specialists say it probably entails intensive investigation of its contract truck companies, background checks on the drivers and possibly even using convoys to move shipments - with a fully loaded tractor-trailer sandwiched between vehicles filled with armed guards.

''The bad guys stake you out weeks, even months in advance and watch truck movements and flight patterns,'' Mr. Porcelli explains. ''They can log on to the Internet and identify commercial jets you might be using.''


Western Digital prefers to put its overseas shipments on all-cargo aircraft because it's tougher for thieves to track those flights. ''But,'' he adds, ''lots of times we want to be on the first flight out and that may be belly space on a passenger jet.''

A typical ''hit,'' he said, occurs when an unmarked van pulls alongside a targeted 40-foot truck. The van smacks into the side, causing an accident. When the driver stops and gets out, the van driver causes a diversion, asking for a driver's license and proof of insurance. Two or three other men, Mr. Porcelli said, ''pop the lock off the rear of the truck and grab as many boxes as possible in two or three minutes.''

These days, insurers are asking their forwarder policyholders, not the shipper, to shrink-wrap shipments - pallets or containers - in black plastic to shield it from prying eyes. Forwarders are being asked to ''cross declare'' shipment contents to other airlines and ground carriers who are involved in a move.

This, however, runs the risk of tipping thieves who may intercept the message.


Rudy Molinet, regional manager of American International Marine Agency's Houston office, said it requires high-tech manufacturers to fill out questionnaires on their corporate security structure, how they secure warehousing facilities and to describe working relationships with their contract cartage companies.

''In the past, we (cargo underwriters) have not required our insureds to use one trucking company over another,'' he explains. ''But we may have information on who does a better job of handling high-value goods.''

Even some of the strongest, most stalwart insurers cannot stomach the losses on high-tech cargo.

''Not only has the freight been lost - the computers, the chips, the high-value consumer electronics products - but the recoveries from airlines, trucks or vessels have been modest,'' said James Zrebiec, chairman of International Marine Underwriters, a unit of the Commercial Union.

Obviously anguished and choosing his words carefully, Mr. Zrebiec, who is also vice president of the American Institute of Marine Underwriters, concedes ''we're highly selective in that area to the extent that we're no longer writing those risks.''

But International Marine Underwriters did not just throw in the towel. It worked with clients on their loss-control strategies but ''in the majority of instances, the losses persisted.''

''It was difficult to withdraw from the market but it was just too much to lose for very low rates. Hopefully, circumstances will change,'' he said.

Yet, the outlook is not pretty.

''There are always going to be thefts,'' said Matthew Stelzer, president of L&J Adjusters North America Inc. of Woodbridge, N.J. ''There has been a vast improvement in loss prevention but we'll never win the battle.''