Theft is an important issue for businesses in all sectors, and unfortunately for many, it is an increasingly costly issue.

Across Australia and New Zealand, theft of plant, assets and vehicles has been increasing. Organised crime has put a target on equipment theft in recent years, with a 45% per annum increase in plant and equipment thefts between 2004 and 2014 within Australia.

This trend highlights the need for additional security across their entire fleet and asset inventory. But additional security around these assets is only part of the answer.

 

The Costs of Theft

Over the 2004 to 2014 period an estimated $51.2 million of heavy plant, equipment and vehicles were stolen from businesses. And plant theft from constructions sites including more portable plant such as compressors and generators costs Australian companies $140 million every year. The cost to businesses is therefore significant. Not only from the insurance costs, but also the operational costs.

Recovery Rates:

Recovery rates of plant and equipment can be as low as 10 percent. A figure compounded by the fact that plant and equipment rarely have distinguishing marks for identification.

According to John Reid, CEO of the Construction and Mining Equipment Industry Group (CMEIG), “The other thing that makes heavy equipment theft attractive and lucrative is that there is no consistent national and industry-wide system of easy identification – so there is no need for sophisticated rebirthing.”

Time Costs:

The UK Commercial Victimisation Survey 2002 found that the average number of working hours spent dealing with a theft of a vehicle to be 20 hours in respect of retail thefts and 16.5 for manufacturing thefts. When applying the average of 18 hours and the average Australian hourly rate (in 2011) of $25.83, the estimated time cost from a vehicle theft is $465.

The Counting the costs of crime in Australia: A 2011 report estimates the total cost per vehicle theft at $6,413 per incident. This largely will also reflect the total financial costs of plant theft, but still doesn’t consider productivity and operational costs.

 

What is Stolen

 In 2014 there was 698 heavy plant and equipment vehicles stolen across Australia. The National Motor Vehicle Theft Reduction Council outlines the breakdown of this as in the below table:

, Whitepaper: Asset Theft on the Rise

Source: NMVTRC (www.carsafe.com.au)

When looking at where these thefts occurred, the overwhelming location was from businesses, commercial and government service sites, with over 40% of plant and equipment thefts and 36% of all heavy truck theft.

Notably, residential and on street locations where the other significant locations.

, Whitepaper: Asset Theft on the Rise

Source: NMVTRC (www.carsafe.com.au)

 

Types of Theft

 Evidence shows that there are usually two types of equipment theft. The first is vandals and joy riders who take equipment and later abandon it. This type of theft is a huge inconvenience for businesses as often, the equipment will have suffered some damage that requires repairs. This leaves the asset unusable for a protracted period and leaves businesses needing to process claims through insurance and paying the insurance premiums. Often with vandal and joy rider theft, the equipment is usually found abandoned near where it was taken – and is thus more often recovered.

The other type of theft is organised crime. These are often professional crime groups that are stealing to on-sell. Talking about organised crime gangs, John Reid states “they know what they are doing because they are often heavily involved in the industry – and the stolen equipment is rarely recovered”. For businesses this is often an even more costly process, as set period needs to pass before an insurance claim can be finalised. For businesses this means extended periods of time without what is often vital equipment to complete work. For some businesses this could have snowballing impacts across projects affecting delivery dates and service levels.

 

Protecting Assets

Protecting assets from theft should be considered from both a prevention and a recovery perspective. The reason for this is that whilst prevention is better than having to respond to a theft, thefts are occurring even for those who are well prepared.

Prevention:

As outlined in the types of theft and the costs of theft, prevention is ideally what every business wishes to achieve. Procedures put in place to ensure assets are locked up and secure when not in use, and that they are monitored when in use can minimise the risk of theft.

With new technologies as well, features such as immobilisers in vehicles can minimise the chances of theft. Other security measures for businesses often include hiring security guards, installing security cameras and the use of guard dogs. Despite all these measure that are already in place across many businesses, thefts still occur and are in fact on the rise.

Recovery:

Getting your equipment back can be significantly more cost effective from a productivity point of view. Whilst assets might be damaged when stolen, it is often quicker to fix items than it is to replace them – especially when it comes to specialist equipment.

There are several recovery methods in the market, including DataDotDNA technology and RFID tags, but by far the most effective is GPS based tracking (telematics). The reason telematics is more effective is that it provides up to date location-based information of where an asset is, where-as other methods assist identification of ownership should they be discovered or recovered. GPS enables quick and efficient, proactive response that not only reduce the recovery time, but can do so before equipment becomes damaged.

Proactive identification of theft is incredibly valuable to business. GPS tracking enables the use of Geofences to identify when plant, vehicles and equipment leave a pre-determined boundary – often a property boundary – and notifications and alerts can be created to provide a warning should assets leave this geofenced area outside of business hours. With this early notification businesses can react in a timely manner, improving the likelihood of recovery and reducing the impact it has on the business. Even if the asset isn’t recovered immediately, the timely notification of the theft of an asset can allow sufficient notice to arrange alternative replacements rather than employees showing up to collect a piece of plant or equipment, only to discover it has been stolen.

Smartrak has a range cases from our utilities, government and infrastructure customers outlining the use of GPS tracking to identify, track and recover vehicles and assets. These include:

  • An infrastructure customer recovered a stolen truck with a digger on a trailer
  • A customer’s truck was highjacked with a load of milk but was recovered quickly enough that the milk being transported was still able to be sold saving $10k in stock.
  • A customer’s tipper truck was stolen and used in several armed robberies. Unfortunately, the truck was recovered in an unrepairable state. But the data of the movements were provided to the police for assistance in their investigation.

 

Works Cited

Construction & Mining Equipment Industry Group. (2017, 12 20). Organised crime gangs behind equipment theft. Retrieved from http://www.cmeig.com.au/documents/Organisedcrimebehindequipmenttheft.pdf

Criminology, A. I. (2017, 12 20). Thefts of vehicles. Retrieved from http://www.aic.gov.au/publications/current%20series/rpp/121-140/rpp129/13-thefts-ofvehicles.html

Jan Shury, M. S. (2005, July). Crime against retail and manufacturing premises: Findings from the 2002 Commercial Victimisation Survey. Retrieved from The National Archives: http://webarchive.nationalarchives.gov.uk/20090120172740/http://www.crimereduction.ho meoffice.gov.uk/business/business42.htm

National Motor Vehicle Theft Reduction Council. (2015, February). Heavy vehicle theft in Australia, 2004 to 2014. Retrieved from https://carsafe.com.au/heavy-map

Russell G Smith, P. J. (2014). Counting the costs of crime in Australia: A 2011 estimate. Canberra: Australian Institute of Criminology.

Shury J, S. M. (n.d.). Supplementary web report 1: Costs of crime. London: London: Home Office. Smyth, R. (2011). Costs of Crime in Victori. Retrieved from Monash University Business and Economics: https://www.monash.edu/business/economics/research/publications/2011/2511costsofcrim esmyth.pdf