Friday, January 28, 2022

"Chaos At Ports: Cargo Theft Soars 356% As Container Crisis Worsens In California"

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"Chaos At Ports: Cargo Theft Soars 356% 
As Container Crisis Worsens In California"
by Epic Economist

"Thieves have been raiding cargo containers every day and taking thousands of products that belong to consumers from all over the country. Shocking new images and footage published by CBS LA this week show debris ‘as far as the eye can see’ laying outside ports and across rail yards as massive package theft accelerates due to a record backlog of containers at the ports of Los Angeles and Long Beach.

Cargo is being stolen at ports way before dockworkers have a chance to unload the containers. And in rail yards, when trains stop in the downtown section of Union Pacific tracks to unload their wares, often staying overnight, thieves target them and take away all valuable merchandise they can find in the hauls. Giant piles of opened packages and torn cardboard boxes can be seen tossed along the train tracks and right off the twin California ports. And it’s more than just a pain – it’s costing a lot of money for everyone in the supply chain, including end consumers.

Many companies have reportedly lost millions of packages, in particular retail giants who ship high volumes of cargo on a daily basis. “Doesn’t matter what time it is. It could be broad daylight and they just don’t care,” Union Pacific subcontractor Louis Barosas said of the thieves while crews were working at the site of the derailment. CargoNet, a company that tracks cargo theft across the country for retailers and insurance companies, explains that this is happening partly because of the historic shift to e-commerce and the extraordinary uptick in consumer demand over the past few years. Ports have never handled such a high volume of cargo, and with a shortage of labor plaguing the supply chain sector, it’s never been harder to move all of those goods around the nation until they get to the stores.

Union Pacific data suggests that cargo theft has soared 160% in Los Angeles since December 2020, and that on average, more than 90 containers are compromised every day. In several months of 2021, the increase from the previous year surpassed 200%, according to the company. For the month of January 2022, the increase is estimated to surpass 356% compared to the year before. In a recent letter sent by companies to L.A. County District Attorney George Gascón, retailers urged action to deal with “the spiraling crisis of organized and opportunistic rail theft.”

“Organized retail theft is one of the fastest-growing criminal enterprises in the world due to the dramatic growth of business-to-consumer online sales, which rose from $4.2 trillion in 2019 to $5.3 trillion in 2020 due to [the health crisis],” explained Matt Albence, a spokesperson for United to Safeguard America from Illegal Trade, also known as USA-IT. Albence’s organization is a private-public partnership created to fight against the sale of stolen and counterfeit goods. “The looting of packages from trains like those seen in Los Angeles County are tied to the same networks connected to the ‘smash and grabs’ happening across the country – and for good reason: it is a low-risk, high-reward offense,” he highlighted.

The biggest issue is the lack of space to process all of the incoming cargo. Crowded container yards prevent ships from unloading efficiently, which gives the offenders numerous targets to choose from. On the other hand, the rising level of cargo theft means that it is consumers who will ultimately feel the impact, with theft now being added to a myriad of other supply chain problems and weighting as an inflationary factor. "Any time you have a theft you're going to have a shortage of certain items," Cornell said. "There will be even fewer things on the shelves when you go out to shop.”

At least 150 container ships are loitering within 40 miles from the ports, plus another 95 slow speed steaming outside the Safety and Air Quality Area. Port congestion is actually worse now than during the holiday season, given that many foreign shippers have sent their goods too late last year. At this point, Americans’ expectations of rising prices are becoming a self-fulfilling prophecy. And slower production, slower shipping, and massive cargo theft are only going to make shortages worse. That’s to say, a lot more turbulence is coming for us, and we should definitely start getting ready for the worst because this crisis is far from over."

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