DC Velocity - April 2010

newsworthy

CargoNet program aims to curb cargo theft

EVEN BY THE STANDARDS OF THE TYPICAL HIGH-VALUE pharmaceutical heist, the hit pulled off March 14 at Eli Lilly & Co.’s Enfield, Conn., DC was huge.

Over that weekend, thieves made off with selected lots of Lilly’s pre-
scription-drug products with a wholesale value of $75 million. To put
it in perspective, the value of pharma products taken in the typical
heist during 2009 was $4 million, according to FreightWatch
Dan Burges, director of consultancy and
intelligence for FreightWatch, said the Lilly
heist is the largest in dollar value of the cases he
has on file. “I’m not saying there hasn’t been a bigger one,
but I don’t know of one larger.”
In 2009, Lilly suffered a $37 million loss of goods in
transit, the largest full truckload loss recorded in
Freight Watch’s 2009 database. In a statement, Lilly said it stopped dis-
tributing products with the affected lot numbers, adding that the
tightly controlled pharma supply chain makes it “extremely difficult
for stolen product to make it to patients through legitimate channels.”
The publicity surrounding the Lilly heist could not have come at a
more opportune time for CargoNet, a cargo theft initiative launched
just six weeks earlier. While there has been no shortage of anti-theft
initiatives in the marketplace, CargoNet, the brainchild of Jersey City,
N.J.-based risk assessment specialist ISO/Verisk Analytics, brings
enough strengths to the table to give law enforcement the edge in cap-
turing crooks and recovering cargo, backers say.

ISO boasts one of the world’s largest databases of insurance claims, housing approximately 670 million claims records. ISO says its database receives over 50 million new claims a year and records 20 million annual searches by insurance companies and law enforcement.

ISO says it enjoys a strong relationship with law enforcement through its ties with the National Insurance Crime Bureau, a nonprofit organization that works with insurers and police departments to identify, detect, and prosecute insurance criminals. ISO adds that it has a proven track record in developing industry data-sharing solutions. This will be crucial to CargoNet’s success because shippers are generally reluctant to share much data about stolen goods with insurers and law enforcement.

By merging these capabilities, CargoNet executives believe they will bring uniformity to the historically chaotic process of dissem- p. 20

Teamsters ready to talk with ABF about wage, benefit concessions

Ending months of speculation, the Teamsters union has said it is willing to discuss possible wage and benefit concessions with less-than-truckload (LTL) carrier ABF Freight System.

In a communiqué posted March 12 on the
union’s Web site, the Teamsters said that
given the poor health of the LTL industry and
ABF’s worsening financial and operating con-
dition over the past 15 months, it is in the
union’s “best long-term interest to fully
engage ABF through formal discussions to
determine if and what type of contractual
relief may be necessary.”
In the communiqué, the Teamsters noted
that ABF’s 2009 revenues were off 21 percent
from 2008 levels, that it recorded a $100 mil-
lion operating loss in 2009 versus an operating
profit of $49 million in 2008, and that it has
been “exhausting cash at an alarming rate”
since the end of 2008.

As of the end of 2009, about three-fourths of ABF’s 9,814 employees were unionized workers.

ABF, which for months has been pushing the Teamsters to reopen contract negotiations with the goal of obtaining concessions similar to those given to rival YRC Worldwide Inc., applauded the announcement. “ABF is pleased that the [Teamsters union] recognizes the need for potential discussions,” said ABF spokesman Danny Loe.

Last November, ABF Chief Operating Officer Wesley Kemp told the annual meeting of the National Industrial Transportation League that ABF was in concession talks with the Teamsters. Kemp said the company would demand wage cuts totaling 15 percent through the four remaining years of its collective-bargaining agreement. The union at the time denied it was in any type of discussions with ABF, a position it reiterated in its March 12 communiqué.

Analysts at JPMorgan Chase said Arkansas Best Corp., ABF’s parent, could gain $36 million in annual pre-tax savings should the union agree to a 10-percent wage cut. ;