Insurers See Shift in Piracy, Stable Truck Thefts

Insurers See Shift in Piracy, Stable Truck Thefts

Global insurance companies that provide cargo risk coverage are starting to see a growing number of claims for losses due to piracy at sea off West Africa.

“Piracy is waning around Somalia but is increasing around Nigeria,” said John Barnwell, global marine product leader for Allianz Global Corporate & Specialty in New York. “The method off West Africa is different. It’s not kidnap and ransom, but more of a robbery.”

Barnwell said pirates off Nigeria tend to be more violent because they are just looking to steal what’s on the vessel and don’t care about taking hostages.

Like Somali pirates, they are attacking passing ships with skiffs or small motorboats. Offshore energy platforms are also at risk. As a result, shipping companies are starting to follow the best management practices that have helped them combat piracy off Somalia. The oil platforms have started employing armed guards and using directional sound blasters that they can aim at the attacking skiffs.

“Incidents of piracy off Somalia have been dropping because of the efforts by navies to patrol the Gulf of Aden and the adoption of best management practices,” said Daniel C. Negron, vice president and director of business development at Thomas Miller Americas in New York.

On land, insurance companies continue to process claims for the theft of truck cargo at about the same levels, with the top 10 states accounting for 80 percent of the claims, especially the Miami area in Florida and along the Texas border with Mexico. Trucks delivering cargo to and from New York’s John F. Kennedy International Airport are also at risk.

Allianz is advising its clients to register their cargo with CargoNet and waives the deductible for losses of cargo registered with it.

“The registration allows law enforcement to have easier tracking of stolen cargo and recover them,” Barnwell said. “If your cargo is moving on a truck with labels showing, it’s protected by CargoNet. A criminal is more likely to attack one that is not protected.”

He said it’s similar to protecting a house with a security system. “If your house is protected by ADT, and your neighbor’s is not, a thief is more likely to go to the house that’s not protected.”

Most truck thefts occur at rest stops, when drivers take a break, so shippers are increasingly requiring their third-party logistics providers and truckers to adopt security and indemnification procedures as part of their contract, Negron said. “The contract may require that a trucker warranty will not be away from the truck for more than a certain amount of time,” he said. “Very often what happens is that a trucker stops to refresh himself and when he comes out that truck is gone.”

Many truck thefts appear to be inside jobs. “The unscrupulous mind works in incredible ways,” Negron said. “You wonder why it is that the tendency is to steal a truckload that is full of goods, rather than the empties. You wonder how it is he knows which to steal.”

The TT Club advises its clients to be careful in their internal procedures as to whom it is they allow to see sensitive information regarding truck shipments. “It’s a function of internal housekeeping,” Negron said. 

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In answer to Mr. Negron's question. Trailers with seals attached have freight in them. Empty trucks don't have seals on their doors. Doesn't take a rocket scientist to figure out if a trailer is loaded. Just walk past the rear doors.