ISRI CONVENTION 2015: Keeping a lid on container theft

Despite the short-term challenges with the export market, exporting recyclables has provided tremendous benefits for many scrap metal recyclers. The downside of the burgeoning export market has been the increase in the theft of material from many containers.

During the 2015 ISRI National Convention, held April 21-25 in Vancouver, British Columbia, a trio of panelists discussed the issue of scrap metal theft on both the offshore and domestic market, as well as steps that can be taken to reduce the chances of a company’s cargo falling victim to theft.

The issue of theft from containers at overseas ports started to gain widespread interest several years ago when copper scrap prices were soaring to record highs. Even with the more recent slide in prices, the theft issue at overseas locations continues to plague the industry. The panelists at the session, “International Trade 101: How to Protect the Value of Your Scrap Exports,” discussed where the problem spots are and how exporters can combat the issue.

Randy Goodman, a long-time scrap metal recycler, focused much of his discussion on a recent survey conducted for ISRI that addressed container thefts at overseas ports. The survey, he said, will go a long way toward supporting the scrap metal industry when going to the Chinese government for assistance in resolving the problem.

Goodman said that the biggest problem spots for container theft are in Hong Kong and the Pearl River Delta, which is used to transport containers from Hong Kong to inland locations in South China. Shanghai also has its share of container theft, but it is not nearly as prevalent as in Hong Kong, said Goodman.

The Hong Kong region accounted for about 10 percent of all copper scrap exports from the United States to China in 2014, at a value of around $290 million. Goodman said the average cost of the thefts in that region are around $10 million per year, with “upwards of 3-5 percent of container copper scrap at a risk of cargo theft.”

David Cuckney, manager of the  International Maritime Bureau of the International Chamber of Commerce, London, said his organization also has been tracking the issue of container theft and concurs with Goodman that China continues to be the “hot spot” when it comes to container theft. He added that South America and Africa also are areas to watch.

Cuckney said it appears copper scrap theft is tied to an organized crime element. “We strongly believe vessel agents, port agents, carrier agents are being bribed.” He said thieves know what containers contain the copper scrap, which means it is an “inside job.”

Cuckney also discussed the many ways in which thieves can pry open a sealed container with only a few simple tools.

Goodman said problems often occur once the cargo is offloaded and transshipped to another vessel up the Pearl River Delta. “That is where the thefts take place,” he stated.

“Scrap theft in China is growing and is an industry wide problem. We are trying to get the steamship lines to recognize it. The volume and financial impact of suspected cargo theft is growing,” Goodman added.

As for what shippers can do, both Goodman and Cuckney said a key is for all parties to work together to address the issue. Goodman said ISRI is working on putting together recommendations to address the issue. For companies looking to grow their export business, Goodman said companies must consider the risk before shipping to some port areas, including Hong Kong.

Other steps Goodman laid out include the following:

• Take plenty of photos of the loaded container.
• When possible, take the most direct route.
• Consult with the International Maritime Bureau.
• Visit the customer. Meeting the customer face to face will help in dealing with the possibility of theft.
• In the transportation sectors, carriers and ports should increase security, which would include monitoring employees at different ports.
• Allocate the resources to prosecute criminals.

Keith Lewis, vice president of operations for CargoNet, a company that says it is dedicated to preventing cargo theft and increasing recovery rates through secure and controlled information, highlighted the theft issue that is affecting domestic shippers.

Lewis said one of the first steps a scrap metal recycler should take is “get the police on your speed dial. Get to know the police. Get tight with law enforcement. If you are dialing 911 after a theft you are in trouble.”

Another point he addressed was overcoming the idea that thieves were unsophisticated amateurs. What is of significant concern, Lewis said, is the level of sophistication for many thieves. “They use GPS to track shipments. They are pretty savvy with how to steal the material,” he remarked.

Additionally, some thieves are using the Internet to run scams. These “cyber crimes” are becoming a bigger issue. These scams can include setting up phony trucking firms, getting payments up front and then never showing up for the delivery.

To combat this, Lewis says shippers and brokers should more closely scrutinize the truckers who are serving them. A shipper doesn’t necessarily have to take a trucker’s fingerprint, Lewis said, but “make sure they are legit.”

Also, Lewis said truck stops are a magnet for problems, especially when truckers are parking loads overnight or over a weekend. “Nothing good happens at a truck stop after midnight,” he stated.

The 2015 ISRI Convention & Exposition was at the Vancouver Convention Centre April 21-25.