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‘Spiraling’ Cargo Thefts Cost Rail Giant $5 Million

Cargo theft is becoming a “spiraling crisis” for one train operator in Southern California.

Photos posted on Twitter seem to show thieves manhandling boxes and poly-bags filled with apparel,  electronics and other goods pulled from shipping containers transported from the San Pedro Bay port complex, which processes 40 percent of the nation’s imports. Train operator Union Pacific blamed backlogs at the Ports of Long Beach and Los Angeles for rising rail congestion that’s attracted opportunistic criminals.

Rail theft is up 160 percent since December in L.A. County, it said—and in several months throughout the fall, criminal activity skyrocketed more than 200 percent year over year. In October alone, the railway operator saw 356 percent more retail product thefts from trains, along with assaults and armed robberies, versus the same period in 2020.

Union Pacific reported an average of 90 containers compromised each day in the three months leading up to the peak holiday season. Over the past 12 months, it estimated $5 million in costs related to claims, losses and damages.

A track repairing worker is seen after a train has derailed in the same section of tracks where shredded boxes, packages and debris left behind by cargo thieves in downtown Los Angeles Sunday, Jan. 16, 2022.
A track repairing worker is seen after a train has derailed in the same section of tracks where shredded boxes, packages and debris left behind by cargo thieves in downtown Los Angeles Sunday, Jan. 16, 2022. Ringo H.W. Chiu / Associated Press

Union Pacific’s December letter to Los Angeles County District Attorney George Gascón urged “leadership, attention, and immediate action” against perpetrators of rail theft. While the Los Angeles Police Department (LAPD), Los Angeles County Sheriff’s Department (LASD) and California Highway Patrol (CHP) recently arrested more than 100, Union Pacific said it had not been contacted for any court proceedings.

Clients including UPS and FedEx diverted their packages away from the region during the holidays to bypass the theft-plagued region. “Like our customers, Union Pacific is now contemplating serious changes to our operating plans to avoid Los Angeles County,” it wrote.

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“We do not take this effort lightly, particularly during the supply chain crisis, as this drastic change to our operations will create significant impacts and strains throughout the local, state, and national supply chain system,” it added.

While the company declined to confirm its plans to halt L.A. County service, a Union Pacific spokesperson reiterated Tuesday that the organization is seeking support from local government. “We need the LA District Attorney’s help to ensure there are consequences for those who prevent us from safely moving customer goods,” the spokesperson told Sourcing Journal.

Union Pacific agents have made “hundreds of arrests”  related to the theft and vandalism, “but less than half are booked, and some are released in less than 24 hours,” the spokesperson added. The district attorney signed Directive 20-07 on Dec. 8, detailing misdemeanor charges including trespassing, disturbing the peace, driving without a valid license and loitering that county law enforcement will now dismiss. The railway asked Gascón to reconsider the measure with the supply-chain-crippling crime wave in mind.

Union Pacific has “increased the number of special agents, drones, specialized fencing, and trespass detection systems” to protect its 1,600 employees, 275 miles of track and nine rail facilities in L.A. County, its spokesperson said.

A train derailed on Saturday in the Los Angeles Lincoln Heights neighborhood home to many recent rail thefts. Union Pacific said Monday that it was investigating the incident that drove 17 train cars off the tracks, suspecting that rails littered with stolen boxes and other debris caused the accident.

Theft reports along the West Coast increased 42 percent year over year in the third quarter, according to prevention and recovery network CargoNet. But other states are battling the same problem. While California leads with 21 percent of reported incidents, Texas (17 percent) and Florida (14 percent) have also faced significant challenges over the past 12 months. Of 359 reported supply chain theft and fraud incidents in the U.S. and Canada in the third quarter, 294 involved theft from trucks. Semi-trucks often make several stops en route to a final destination, giving thieves many chances to steal goods, CargoNet said.