PORTS—Crime on the Waterfront

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Cargo Theft Soars, Bringing Rise in Violence

Cargo container theft has skyrocketed at local ports, rail lines and Los Angeles International Airport bringing with it a sharp rise in violence as a new breed of criminal gets into the act.

The region leads the nation in reported container theft, more than doubling from $300 million in 1996 to $600 million last year.

Hijackings of truckers and kidnappings of container yard security guards that once were a rare occurrence are becoming more commonplace.

The number of kidnappings by gunpoint of security guards already has increased from an average of two or three a year through 2000 to a dozen so far this year. Hijackings of truck drivers making stops for lunch or to refuel also are on the rise, based on anecdotal evidence.

“We’re getting a different element that’s involved in these thefts,” said L.A. County Sheriff Lt. Joe Lista. “Anytime you have the use of weapons and/or force, it heightens our concern.”

Lista heads the multi-jurisdictional Cargo Criminal Apprehension Team (CATS), one of four task forces in the county trying to get a handle on the increase in theft. CATS includes officers from the L.A. County Sheriff’s Department, the Ontario and Vernon city police, the California Highway Patrol and the FBI.

Nationally, $12 billion worth of cargo was stolen last year, up from $10 billion in 1996.

Most thefts still occur in the so-called “driver give-ups” where a driver transporting goods to and from the ports and distribution centers or warehouses is paid (usually between $2,000 and $3,000) to park the vehicle along a road and leave, allowing the thieves to steal cargo.

Other popular methods include paying off security guards and dispatching personnel to turn a blind eye while cargo is taken at the container yards.

“If these guys aren’t making (great) wages and someone comes up to them and offers them $2,000 to look the other way, they’re thinking, ‘How are (authorities) ever going to prove it?’,” said Patricia Senecal, vice president of Rancho Dominguez-based Transport Express Inc.

Her company pays in-house drivers an average of $15 an hour, while contracted drivers are paid an average of $160 per container.


Organized crime involved

Many of the culprits are tied to the Mexican Mafia, but others are connected to organized crime in Ecuador, El Salvador and Peru, authorities said. Older members of the L.A.-based Crips street gang are involved as well, authorities said.

“These guys in their younger days were out gang-banging and doing violence and dealing drugs,” said Brett Millar, an FBI supervisor who runs the Interstate Theft Task Force.

“Now they’re out of jail, they’ve grown up and graduated to a different crime. They are stealing on demand. If they’ve got to resort to violence, they’ll do it… The risks are lower and the profits are higher.”

Someone convicted of trafficking $1 million in drugs could face a prison sentence of 10 to 20 years while stealing cargo of the same value might net a sentence of probation to three years, he said.

Crew leaders have a well-networked system of quickly unloading products on the black market, which thrives on street corner sales.


Networking stepped up

Law enforcement authorities said they are stepping up networking efforts with industry personnel in an attempt to anticipate crimes before they occur.

So far, one person, has been arrested in connection with a kidnapping and more suspects are under investigation for kidnappings and transfer of stolen property, authorities said.

Carson resident Michael Jackson, 32, faces seven felony counts, including robbery and kidnapping for the purpose of robbery. He was arrested June 29.

Cargo CATS, with a staff of eight investigators and two supervisors, is also pushing local law enforcement agencies to double their staff. But with no money available from the state recent appropriations for anti-cargo theft operations all went to the California Highway Patrol Lista said those agencies have difficulty helping out.

“There’s so much happening and so many demands being placed on police services that it’s really hard to provide a detective to the (Cargo CATS) unit,” he said.

The National Cargo Security Council, an Annapolis, Md.-based industry trade group, for years has been asking lawmakers for assistance. U.S. Sen. Ernest Hollings, D-S.C., has introduced a bill to establish stiffer sentencing guidelines and to make it easier for authorities to collect crime data.

While warehouse and distribution centers are crying for help, many of them serve as a roadblock to catching criminals by not reporting incidents. They fear retaliation from insurance companies that would boost already skyrocketing rates as well as wary retail clients who might take their business elsewhere.

Some major insurers, such as XL Specialty Insurance Co., already have pulled out of the cargo insurance market.


Restrictions on policies

Others have sharply increased rates and placed heavy restrictions on policies, such as mandating electronic tracking systems in trucks, unmarked boxes in containers, and limits on the amount of coverage for certain containers. High-target items might have a coverage limit of $250,000 per container even though its contents might be worth $1 million.

As recently as three years ago, Los Angeles-based Avalon Risk Management Inc. insured ocean cargo containers carrying low-target items (shampoo, tires, books) for 15 to 25 cents per $100 of value and high-target items (consumer electronics) for 25 to 35 cents per $100 of value.

Today rates are 23 to 55 cents for low-target items and 35 cents to $1 for high-target items.

“With insurance, it’s pretty much black and white,” said Keith Sanchez, the company’s regional vice president. “If the premium-loss ratio is anything above 70 percent, the insurance company is usually losing money. You can literally walk away with hundreds of thousands of dollars in computer chips in your arms. The insurance companies have been paying some huge claims of late. So we’ve just stepped back and said, ‘You know what? You’ve got to insure it our way or no way’.”

Avalon’s rates for damage and liability of trucks has also increased from $2,300 to $2,700 per vehicle a year three years ago to $4,800 to $5,700 today.

Most stolen trucks are recovered, however, as the thieves unload the cargo and leave the vehicle on a roadside.

In addition to using unmarked boxes, changes recommended include video cameras, more security personnel, background checks on applicants and prohibiting drivers from stopping en route to their destination.

Truckers are urged to dispose of delivery orders obtained by customs officials at the ports, where criminals can dig through the trash to learn which yards have the high-value cargo.

Transport Express, which pays a service $200 to check the employment records of job applicants, also tries to use drivers that have been with the company for years rather than seasonal drivers.

“You have a lot of faith in drivers who have been here 15 years,” said Jason Kowalskie, a company sales executive. “Someone who has been here six months may not have as much interest in the company succeeding.”

“It’s a serious problem,” Lista said of cargo crime. “Somebody’s got to pay for these thefts. Ultimately it rests on the backs of consumers.”

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