Protecting the Supply Chain from Sophisticated Theft Networks: Double Lock USA

Cargo theft is evolving faster than most of us can keep up with, becoming a multimillion-dollar issue across North America. In this episode of the Trucking Risk and Insurance Podcast, host Chris Harris sits down with Brett Frazee, President of Double Lock USA, to discuss the sophisticated networks behind these crimes and why a multi-step approach to physical security is essential for protecting your freight.

Brett shares his insights into the rapidly changing "theft arena," where petty crime has been replaced by massive, technologically advanced organized crime rings. We dive into why Southern Ontario and other major hubs are seeing record-high theft rates and how the industry is fighting back.

Learn about the latest in physical security, from heavy-duty industrial locks to the new division of serialized security seals, and how these physical deterrents work alongside GPS and telematics to create a comprehensive defence.

Connect with Double Lock USA:
Website: doublelockusa.com
Linkedin: @doublelock-usa

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0:00 – Introduction: The Evolving Crisis of Cargo Theft 
0:54 – Meet Brett Frazee, President of Double Lock USA 
1:21 – The New "Theft Arena": From Petty Theft to Organized Crime Rings 
2:28 – The Financial Impact: Addressing a $1 Billion Problem in North America
2:57 – Hot Spots: Why Freight Theft is Exploding in Southern Ontario 
3:40 – Why Law Enforcement is Struggling to Keep Up 
4:48 – Joint Task Forces and Cooperative Industry Security 
5:13 – Double Lock USA’s History and Insurance-Rated Security 
5:56 – The Multi-Step Approach: Physical Security, Seals, and Technology 
7:12 – Future-Proofing Cargo: RFID Seals and Strategic Deterrents 
8:20 – Creative Thieves: Dealing with Sophisticated Targeting

Transcript

0:01

Welcome back to the Trucking Risk and Insurance podcast. I'm your host, Chris Harrison. Today. We are tackling a problem that is evolving faster than most of us can keep up with, and that's cargo theft. Industry data shows that theft is up significantly anywhere from 18 to 30% becoming a multimillion dollar issue right across North America. Joining me today is Brett Frazy, president of Double Lock, USA. We're going to discuss the sophisticated networks behind these crimes and how a multi-step approach to physical security can help protect your freight. Let's. Welcome to the Trekking Risk and Insurance podcast. Hey, Brett, welcome to the Trucking Risk and Insurance podcast. Can you take a 2nd and introduce yourself to our viewers, please? Sure. Well, my name is Brett Frazy. I the president of Double Lock, USA, a physical lock and security company. Um, and I apologize. I'm coming to you from a car outside my warehouse right now. We're here to talk about cargo theft. If you were to explain the cargo framework, the cargo theft framework right now, what are we into at the moment? Well, you're into a theft arena that is evolving so fast that law enforcement, um, security companies, uh, tech companies and physical security companies like ourselves were drinking from a fire hose to catch up. You know, it's evolved from, uh, petty theft, um, small regional organized crime to massive technological, um, organized crime, crime rings, um, fence networks, uh, fencing, you know, the product. So it's, it's really a rapidly changing and sophisticated network of, of, uh, theft across the, the spectrum of cargo and freight from, you know, intermodal to see, to, uh, trucking. It's it's everywhere. It is everywhere, and recently I had a different guest, and he was saying it was up 16%, this year, and it's been on a steady increase for the last 5 years. Yeah, I think 16% is probably a conservative number. I mean, we use there's a there's a company out there, very risk, um, cargo net, and they, you know, they're kind of the industry bellwether. Um, and, you know, they're talking, you know, 18 to 30%. Um, and it's, you know, multi-multimillion, almost a $1000000000 uh, issue, um, in in North America. So it's massive. It is. I mean, here where I'm from in southern Ontario. Um, my little district, uh, I mean, in where I'm from, we're in one of the hot spots in North America for freight theft, uh, we're usually right up there at the near the top, one or two. Um, but in my little small area here. We lose on average, a load and a half per day, or 450 to 500 loads a year is how I get a load and a half today a day. And it's just crazy that we can lose that much cargo, and law enforcement doesn't seem to be doing a whole lot about it. Well, you know, we've had um, we've had some conversations with, um, you know, some of the law enforcement, local law enforcement. We have a consultant on our team, and we have consulted, you know, each of the railroads has their own police department or whatever. And I would say they're, they're, they're doing a lot, that everybody's just a little bit taken aback at how advanced it, it's become so quickly. You know, this wasn't even a thing, a real thing 5 years ago, and now it's become a major, major source of issue. And so there are some really nice groups out there that are focusing in on this. We have meetings, you know, 3 or 4 times a year about it. So I think they're they're on it. It's just, um, one of the big challenges with theft is, you know, a little bit political, let's call it, um, but, you know, it's hard to determine where it happens sometimes. So law enforcement is, you know, they're restricted to enforce in areas that crimes happen. So it becomes a little problematic when they, you can't identify where the actual theft happened all the time. So, That's a little bit of the challenge. I would say a lot of the challenges they're forced with on a daily basis. So there's, you know, there's now there's some joint task forces and some, there's some ways they're working together, um, to try to overcome that issue. But, uh, but it's an issue for sure. Oh, it's a huge issue, and to bring it back to the purpose of this interview, um, how can double lock help prevent cargo theft? Well, Double Lock is a 30-year Dutch brand, and we have a track record of cargo theft, um, prevention, and in Europe. We're one of the very few companies where our locks are insurance rated. Here in the United States were a newer brand. Um, And so we're going through the process to do that. But in Europe, for example, um, there's rating agencies and, you know, some of our container locks are rated heavy. uh, rated standard, depending on the cargo you're, you know, caring, you need different insurance requirements or if you want to cover it, um, insurance companies require it. Um, but we uh, we're a physical security company. So, um, we offer heavy duty industrial locks for, um, you know, containers, trailers, um, freight, other cargo. And then we, as you kind of alluded to, we have a, you know, more of a consumer friendly line that you'll see in more retailers, but, um, you know, that's one step in the process, and we believe that securing freight is a multi-step approach. So, it's physical security using locks like we provide. It's seals. We also have a, uh, it's called steer, uh, steer security seal company that we're launching next week, um, that's, that's going with the serialized seals. That's another component of track and trace and security, as well as more the advanced technologies like telematics, GPS, satellite, cameras. So it's a multi-level approach. But we're really the 1st stage of that security aspect, right? Physical security at, at point of, uh, seal. Yeah, and by the way, by the time this episode goes live, your new SEAL division will also be live. So I don't want people waiting a week because it will have been live for a few weeks already. just to be clear. Yes. And and and a little self-promotion here. This, we've, we've done a nice, um, strategic alignment with one of the largest, um, international seal production and manufacturer companies. Um, so we are, you know, jumping in really hot with this. We believe it's part of the new solution. We are looking at technology in the future that RFID seals, um, other type of technology that you can integrate into both seals and locks. Um, you know, so, you know, we're looking in in the, uh, in the, you know, the, the, head, but we're also not going to take our eye off the fact that physical security starts with having a great product, having strong materials, um, you know, in in that real physical security deterrent at the point of, um, of break-in. Well, this is, I really believe having a really good luck, will at least discourage some of the, um, the thieves away from that particular trailer or container and let them go on to a different one. However, um, we both know that sometimes the loads are targeted, and they're going to do their best. Damn, they get inventive sometimes, uh, to get that, that, uh, cargo, no matter what steps we take, um, to, They're just gonna get it. anyway. How do you... Go ahead. Sorry. Well, and you kind of alluded to it and given enough time and the right tools, you know, everything is defeatable. So, the more creative they get, the more of the, um, you know, the information they get ahead of time. They can definitely target the cargo they want. Yeah, and I mean, I've even seen modified 5th wheels so that the 5th wheel can clamp to that trailer that has a 5th wheel pin trailer lock on it because they know ahead of time. that that particular lock is used on the trailer and they actually modify a 5th wheel. Um, to accommodate it. Like, they can get really inventive, but that takes a lot of time and a lot of planning. Yes. In cargo theft, we both know it's rising all the time, what's actually changing in the threat landscape? Well, you know, I'm, I'm, on the physical security side, you know, we believe, and this is what, you know, law enforcement and, um, and everyone is is kind of talking about, the threat level is is, is going up because the sophistication and the, the type of criminals that are involved in this are different type people. These, these are cartels in a lot of cases, I mean, these are real heavy duty bad people, um, that are used to smuggling, you know, people and drugs, and, um, and this is a nice little ancillary revenue opportunity for them. So they're serious criminals, with serious means. So I would say that it's escalated to a very, very high level. And the reason I believe, part of the reason, at least, that they're now into cargo theft, these organized crime groups, is that at least here where I'm from in Canada, there's little downside to it. If they do get caught. The 1st offense, they don't even get jail time here. It's crazy, and it's often considered a victimless crime because it's only cargo, and if nobody gets hurt, it's not a big deal. Well, and I think that's actually one of the topics that law enforcement are trying to, um, in the respective district attorneys are trying to bundle these crimes, um, on each other, so it has a little bit more teeth. Um, certainly I can't speak to that, but, you know, in some of our meetings, that's where they've alluded. Right. It's, as I say, it's just crazy. Here, I saw a news report where a fella got convicted of a 2nd cargo theft, and he got some jail time, but not significant enough. It was crazy. Now, I know the US has a, has a little better, uh, deterrence than that. In that respect in, in Canada. We are quite nice to our criminals. You know. It's crazy. Where are the carriers in the fleet's most vulnerable. And what do you think the most common points of failure are? Well, I think it's clear that, um, whenever cargo sits for any extended period of time is it's most vulnerable, um, whether that's on a rail car out in the middle of Texas, you know, for a couple of days, uh, um, or overnight at a truck stop where, um, it's just sitting there and it can be easily more easily targeted, when it's in motion, obviously, it's more difficult, when it's insecure large yards, it's more difficult. Although, you know, they're they're going through fencing and, you know, they're they're getting, um, they're getting very creative. So I guess the bottom line, wherever it stops outside of a secure warehouse, the longest is where it's most vulnerable. Yeah, anytime the freight's not in motion, it is extremely, um, available and can easily be be attacked. That's, you know, Absolutely. Well, what is the difference between locks and seals? Well, primarily seals are used for, um, kind of the 1st line of defense, but they are really more track and trace. So they want to know, you know, most seals are serialized, so they indicate who put the seal on and who took the seal off. So you can validate, you know, obviously that uh, food or pharmaceuticals or electronics, who had possession of that in the last um, opportunity. So that's the seal. The lock, obviously, is a physical security, and it's a it's a deterrence, number one, um, aspect, and number two, the security. So depending on the level of security that you need, um, you have to employ different tactics in different locks. And is a lock and kind of a stupid question, but I really don't know the answer. Is a lock stronger than a seal in most cases? Well, most cases it is. I mean, there are some, you know, bolt seals that are, you know, steel that are one use seals, um, very strong, um, cable seals that are very strong, but in most cases, those, um, they're tools to break them because they're one, they're one use, that's way to design. And locks are most of the time stronger. And then there's some, you know, high material composites that make certain locks much, much stronger than others. And I would assume that double lock. Uh, has some of those um, as options. I would imagine you have a range of locks. We do. And and talking about, um, the advancement of technology, you know, um, that's, that forced the lock companies to become more, uh, ingenuative as well because, um, you know, the, the little battery grinder that wasn't around 10 years ago, you know, with a, with a diamond blade can get through a lock pretty quickly. Um, so we've been forced along with the others to, um, innovate and we have, you know, uh, products that have, uh, materials that resist that cutting, um, at a much higher level than they used to. So again, you know, we want to deter and keep them, you know, moving to somewhere else that's not secured. Um, if it takes, you know, 20 minutes or an hour or 2 hours to cut through a lock. Yeah, there's, there's a, it's noisy, it's inconvenient. Um, unless there's something that they really need in there. Um, we want them to keep walking. Yeah, and in most cases, the longer it takes for a thief to break in. Um, the less likely they are to hang around because they're hopefully afraid of getting caught all the time. Well, and some of the, the neat things in technology that are coming out are some, some materials and other um, aspects that will notify the, you know, the freight carrier or the company like ourselves that there's somebody tampering with a lock, maybe something's been cut, uh, so we can deploy law enforcement, um, much faster, um, which is going to help reduce that, um, frequency for sure. Yeah, well, if it starts to notify people, uh, hopefully law enforcement gets there a heck of a lot quicker. But as you, I mean, most freight is in major areas where there's population, but you also mention that from time to time, it may be in Texas for a couple of days sitting on a rail spur as it waits to move forward again. And in those cases, I imagine the thieves know about it. And the 1st level of deterrent would be a strong physical lock of some sort. Well, yeah, I think that's that's the point. You know, a lot of the conversation has shifted to um, telematics and GPS, and well, that's important. You know, our perspective is let's let's avoid the theft at the beginning. Um, and if you can't, then you employ those 2nd and 3rd and 4th level, um, deterrence areas. But as we talked about earlier, is we start to, um, implement some of this more advanced technology, even if something is stolen out in the field, you'll be notified in it goes to the right department or the right law enforcement agency. So now we have a proof that a crime has happened in Ontario versus Detroit, right? And so that changes the game from an enforcement standpoint quite a bit as well. So, you know, as we start to bundle all of these different aspects on each other, I think it's all gonna help reduce the overall theft, um, and deterrence aspect for sure. And as we get to, um, the end of this interview, how can people find out more about double lock USA? Well, you can obviously go to our website. It's doublelockusa.com. Our European division is double lock.com. Um, you can learn more about our SEAL division at steer STIERseals.com. Um, and you can Google us. We're highly ranked there. But I would also, if you're, if you're heavily into learning more about this, there's some great resources out there, I mentioned very risk earlier, um, that can help educate people about the impact of, of this aspect. And, um, you know, just a quick story, how I got into this is, you know, I had a, of a good friend who, uh, is shipping, you know, 1000000000s of dollars in in freight all over the United States and crucial freight. And they're losing, um, out of 20 trailers, a shipload, um, they're losing 4 to 5 containers every time it was coming in. So, um, and and that interrupts the entire ecosystem. Not only does your consumer's cost go up, um, but the business cost goes up, insurance cost goes up. So it's a real impact to everyone's bottom line that people don't realize. And so, you know, this was a unique situation where we put 50 of our, um, container locks on their factory, um, freight containers in Asia, and they came all the way through the supply chain and we're happy to report that, um, we had a 98%, um, uh, success rate where only to, I say only, but only one container was lost in that, and it was, you know, uh, highly vulnerable area out in the middle of Texas. So, or California. I apologize. So California is by far, uh, in a way, the leading area of theft, followed by Texas. But, um, but so that's an interesting story and how we got into it. And, you know, and he's telling me he's got to raise, you know, the prices on his his goods, you know, 20 to 30% just to offset these these high theft issues. So it's a real issue. everybody. Yeah, cargo theft. I wish we could put an actual dollar number to it, but because so much of cargo theft goes unreported, because a lot of it is either below insurance deductibles or the carrier doesn't want their name out there in the public, um, because they want to be known as the secure carrier, and they don't want to admit to a loss. There's a number of different reasons that, um, cargo theft just doesn't get reported at least 100% of it. But it's estimated to be in the 1000000000s right now, correct? Oh, absolutely. And there's another component to it. You know, there's these these freight logistics companies, everybody's working real hard and they're a lot of them are working on razor thin margins. So to ask them to invest in, you know, advanced security, um, is really difficult and who's going to pay for it? Um, and ultimately what happens is you mentioned, the insurance company pays for it if they if they indeed put in a claim. But those, you know, insurance companies pass that on in premiums and what have you. So, There's a lot that goes unreported for a reason. Uh, it's good or bad, but it's it's unfortunate for sure. And nothing's for free. So if you use insurance, we all know that it might go up the next time, uh, that you hit renewal, uh, that just, that's the way of life. And if we don't report it. The company still needs to, the shipper still needs to make a profit on their product. And so they've got to raise the rate somehow. It's just cargo theft is a huge, huge problem. But, Brett, I really thank you for coming onto the show because this is the 1st line of defense. And if you do want to know more. It's double lockusa.com. Reach out to Brett, and the resources that Brett mentioned, we'll put them in the show notes down below so that you can get to the Brett, last word to you. Well, I really appreciate being on a show. Thank you for your time, and thanks for investing in this because it's really an important topic, and if we can ever be of assistance to you or any of your followers, please let us know, and we're happy to help in any way we can. So we're just honored to be here. Thank you.