Heavy equipment thefts in the Gulf region and surrounding states increased by 22 percent in the aftermath of hurricanes Katrina and Rita when compared with the same period in 2004.
A report by the National Equipment Register (NER) made public Jan. 10 outlines the various effects that the worst hurricane season on record has had on construction equipment security.
Thefts following the two storms in the area rose from 61 to 74 machines, according to figures obtained from the NER.
“The purpose of the report is to heighten awareness of the increased risk of equipment theft in the area of reconstruction and to warn those buying used equipment to be careful,” said David Shillingford, NER president. “We also hope that some of the advice that is best acted upon in advance, such as getting equipment registered with NER, will be taken prior to the 2006 hurricane season. Whether or not we issue a similar report for the 2006 season will depend upon its severity. Sadly the chances are high.”
Shillingford said thefts from the period in the report are still being discovered and reported and the figure could rise. The report is the first of its kind by NER.
“The problem of equipment security must be placed within the overall context of the 2005 catastrophes. The terrible toll on human life and personal property dwarf the problem of equipment security,” the report’s introduction states.
It continues, “But because heavy equipment is critical to the reconstruction efforts it is more important than ever to do anything possible and practical to thwart equipment thieves. Equipment owners and insurers can do much to support law enforcement’s efforts to combat equipment theft at a time when so many additional public safety challenges exist for officers in the southern states.
Primary findings in the report include:
• In the weeks immediately after each hurricane, the increase in theft was primarily in neighboring states, but as more equipment moved into storm damaged areas, thefts increased in these areas as well.
• The type of equipment stolen reflects normal theft patterns. More than 60 percent of the equipment reported stolen to NER was accounted for by skid steer loaders, backhoes and small to medium sized tractors.
• Because of the scale of the reconstruction efforts, equipment thieves are finding a concentration of poorly secured equipment and a ready market for resale.
The report concludes that “the detection of theft and fraud related to this hurricane season will be an ongoing process and it is never too late to report a loss or suspicious activity. The lessons will also be applicable for future catastrophes and much of the advice, particularly the recording of equipment ID numbers, will be more effective if acted upon prior to the 2006 hurricane season.”
Several companies that lost equipment declined comment when contacted by Construction Equipment Guide.
But, Mac Johnson, a vice president of Yates Construction in Mississippi, said after Katrina his company had two tractors stolen from a road site in north Mississippi.
“We don’t know if that was directly related to the hurricane,” he added.
He said no equipment owned or leased by the company has been reported missing from the Gulf Coast “as far as I know.”
According to Johnson, the company has not registered its heavy equipment.
“We normally lose a piece or two of equipment and we don’t ever recover them,” Johnson said.
The report does not rely soley on figures, but includes specific examples of equipment theft.
“At the end of October 2005, NER received a call from a citizen in southern Mississippi who was being offered a used Caterpillar D-5-LGP dozer at a price below market value by sellers who alleged they were FEMA employees disposing of ’no longer needed’ machines.
“Before proceeding with the purchase, the prospective buyer wanted to determine whether or not the dozer had been stolen. NER noted the Product Identification Number [PIN] the buyer obtained from the sellers had several inaccuracies and edited the PIN to conform to established formats. NER search the corrected PIN against its database and found a close match to a recent theft report sent to NER by a police agency in northern Mississippi — however, the two PINs differed by one digit.
“The PIN on the theft report had a ’5’ in the position that an ’8’occurred in the PIN provided by the buyer. Given the ease with which a ’5’ can be altered to an ’8’ on PIN plates, the NER analyst worked with the potential buyer and the reporting agency to refer this to a local agency, the Forrest County, Mississippi, Sheriff’s Department.
“The department sent officers to the sale location and, upon examining the dozer, were able to confirm that the ’8’ seemed to be tampered with and through comparing numbers from other components on the machine were able to determine the dozer matched the one from the theft report.”
As a result of this recovery, officers inspected other equipment that may have been sold by the involved parties and identified other machines as being stolen. Thus far, officers have impounded nine machines valued at more than $350,000 and made at least two arrests. Of the recovered machines, six were backhoe loaders and three were bulldozers.
The report urged equipment buyers, auctioneers and dealers to be suspicious of deals that are “too good to be true.”
According to the report, there is also bad news in states farther from the Gulf region.
“The effect on equipment theft levels will be felt nationwide. The shortage of new and used equipment before the hurricanes is now being compounded as equipment pours into the Gulf states. As demand rises, so does the motivation to steal and the ease with which stolen equipment can be sold,” the report stated.
“The most important thing for equipment owners and insurers to do is to ensure that law enforcement has as much information as possible to investigate equipment theft. Equipment owners should keep a record of equipment identification numbers [of any and every type] and should physically check inventories more often than normal — particularly equipment that is not in constant use.
“Missing equipment should be reported to the police,insurers and NER as quickly as possible. Registration of all equipment with NER before the theft allows law enforcement to identify the true owner of stolen equipment while the thieves are moving it — usually at night or on weekends.”
Rental equipment is being targeted by thieves as the equipment is either concentrated in one known location — the rental lot — or is being used by a customer and, therefore, out of the control of the rental company, according to the report.
It states, “the ease in which thieves can obtain a stolen identity also makes use of false identities a growing trend in rental equipment theft. Rental companies should provide clients with advice and, where possible, additional equipment and services to reduce the risk of theft.
Rental companies also should be alert to any ’red flags’ such as unusual requests for drop-offs or inconsistencies in a renter’s documentation. Copies of photo ID should be a minimum requirement. If a suspicious renter is deterred by such diligence, it is important to report the event to local law enforcement and NER as this will help build an intelligence picture and allow alerts to be issued.”
In the report, NER warned the buyer to beware. “Although it is not illegal to sell storm-damaged equipment, it may be illegal to sell storm damaged equipment without certain disclosures. Even if the equipment is still in good operating condition, or even new, it may not be covered by all or parts of the manufacturer’s warranty.”
According to the report, manufacturers, insurers and NER are tracking equipment damaged in the hurricanes.
“Buyers should be aware of the risks and check with their local dealer or NER prior to purchase,” cautioned the report.
Shillingford said a series of free one-day regional heavy equipment theft summits sponsored by FBI-LEEDA and NER will help raise awareness of thefts in the area. Previous seminars have been a huge success, according to Shillingford.
“We have ten planned for 2006,” he added.
For 2006, seminars include Arlington, TX, Feb. 23; Phoenix, AZ, March 14; New Jersey, April; Memphis, TN, May; Chicago, IL, June; Oakland, CA, and Seattle, WA, July; Atlanta, GA, October; and Miami, FL, December.
NER was launched in August 2001 to develop a national solution to the heavy equipment theft problem. The company, headquartered in New York City, offers heavy equipment owners a chance to register equipment as part of a national database. NER provides expertise in theft prevention, equipment recovery and used equipment searches. In 2004, the company tracked a total of 4,973 theft reports.
For more information, visit www.nerusa.com. CEG