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Source: American Shipper Date Posted: 4/20/2010 8:58:27 AM
Crime ClearinghouseCargoNet offers collaborative approach for sharing cargo theft data. In January, the Insurance Services Office (ISO) and the National Insurance Crime Bureau launched CargoNet, a cargo crimes database designed to enable better sharing of information between victims, their business partners and law enforcement. The goal is to establish a single clearinghouse for cargo theft by aggregating information from existing databases and crime reports to identify trends, such as which transportation lanes or commodities are being targeted by thieves, or what techniques they are using. Different law enforcement agencies and task forces, insurance companies, industry groups and security companies compile data and track cargo theft to the best of their ability. But the information is fragmented and local police forces often don’t share data because they don’t have the resources to manually sift through crime reports. Initial response from some security experts is positive, but the extent to which CargoNet will be able to capture more events and create a more complete picture of the risk environment is uncertain. CargoNet is being designed from the ground up with input from the insurance sector, law enforcement and the supply chain industry, Managing Director Maurizio Scrofani said. It is modeled on the National Equipment Register, which has been successful in limiting theft of heavy construction and farm equipment since it was founded by David Shillingford in 2001. The database is populated with equipment serial numbers from manufacturers, fleet owners and public records to assist law enforcement and insurance industry officials recover stolen equipment. The ISO, which owns and operates the National Equipment Register, provides statistical, actuarial, claims and other information as well as analytical tools to insurance industry clients. ISO is a subsidiary of publicly traded Verisk Analytics. CargoNet began operating on a limited scale at the beginning of the year with early participation by the Chubb Group of Insurance Cos., Allianz Global Corporate & Specialty Marine Insurance Co., and CNA, the nation’s seventh-largest commercial insurance writer. The insurance industry is expected to be the largest contributor to the database, but crime events will also be accepted from individual manufacturers, transportation providers and industry groups that have similar data repositories, as well as some law enforcement databases, Scrofani said. Crime analysts and subject matter experts will research the reports before entering them to make sure the database is accurate. Many transportation companies do not report cargo crimes and simply absorb the loss because of concerns about data privacy, jeopardizing customer relationships, damage to reputation and insurance premium increases. CargoNet hopes to overcome that reluctance and get more complete reporting by ensuring data protection, Scrofani said. The company will only allow law enforcement to see theft data, unless a participant specifies what other parties can access its information. “I believe when we begin to aggregate data we’ll begin to see crime patterns and gangs moving from state to state,” Scrofani said. “The trends that exist today may not be the trends that exist tomorrow as we connect the dots.” Pharmaceutical manufacturers, wholesalers and retailers, share information about cargo theft among each other and with law enforcement through a system called RxPatrol. Charles Forsaith, corporate director of supply chain security at Purdue Pharma Technologies, said the Pharmaceutical Cargo Security Coalition that he chairs will share its data with CargoNet. “The more places that data resides, the more chances I have to get that product back or solve that crime. I’ll share it with anyone who is willing to take it,” he said. CargoNet represents a technological advance because if a product is recovered authorities can quickly get links to people who have reported a loss, Forsaith said. But Ron Greene, general manager of FreightWatch International, questioned whether simulating the National Equipment Register will work for cargo. “I don’t think that’s a realistic operational model to capture everything stolen down to components in cargo. When a company loses a truck of computers it may take a week to figure out what actually was stolen from a piece-count standpoint. And so much stuff is sold on the Internet or shipped overseas that it’s not an easy means to recover property,” he said. FreightWatch International, which has its U.S. headquarters in Austin, Texas, is a logistics security firm that also operates its own proprietary cargo theft database. LoJack Supply Chain Integrity is another company that, along with cargo tracking and recovery services, has a platform for compiling cargo theft events and sharing the data with members. It claims 709 member organizations. It receives batch data from the California Highway Patrol, the New Jersey State Police and CargoWatch, a Canadian industry group, as well as event reports from individual members. CargoNet has a command center that takes in calls about thefts and alerts local and regional law enforcement agencies. It can transmit the alert to drivers, gas stations and rest stops at the victim’s request. The system also monitors the secondary sales market on the Internet for signs that stolen goods are being resold. Its other primary role is analytics, which are shaped by about 257 information fields. Subscribers automatically get reports on the commodity, state, dollar amount and day of the week involved in cargo thefts, or they can create more customized reports, Scrofani said. The extra detail allows CargoNet to provide more robust modeling and forecasting than has been available in the past, he said. Most of the funding so far has come from the insurance industry, but CargoNet is now marketing its services to other industry sectors. There is no cost to report a crime, but utilization of the data and features requires an annual membership. Insurance company rates are based on their premiums and rates for transportation providers are based on revenue tiers, Scrofani said. The company is still developing a pricing structure for manufacturers and retailers. There is no charge for law enforcement agencies to use the system. CargoNet also plans to provide theft prevention services, including:
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