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Iron Thievery Tops $1 Billion

Rapid recovery is the key to thwarting equipment rustlers.

Fri September 20, 2013 - National Edition
Irwin Rapoport

Despite the variety of options construction and equipment rental companies employ to protect constructions sites and depots from thieves, more than $1 billion in construction equipment is stolen annually according to National Insurance Crime Bureau statistics. When multiplied by the many impacts of such thefts, the cost to the overall construction industry is even higher.

This not only translates into lost productivity, increased costs and lost rental revenues, but the whole process of dealing with insurance companies to sort out the paperwork and claims, and the real possibility of increased insurance premiums.

However, there is one option that more owners of construction vehicles and equipment are turning to in greater numbers. The solution, said the LoJack Corporation, not only minimizes theft, but aides in the rapid recovery of stolen units.

Last July 21, LoJack — the manufacturer of the LoJack Stolen Vehicle Recovery System — helped the Colorado Springs Police Department recover a Terex mini-excavator that had been stolen from the parking lot the previous evening from a rental company. The vehicle, valued at around $40,000, was rapidly returned to its owners.

The self-powered LoJack transponder had been placed in the vehicle in May 2011 and after being activated by the police, the vehicle was located and recovered within hours of the verification of the theft and activation of the LoJack system. In this case, the temporary loss of the vehicle had no impact on the business which owns it. Just a few days earlier, presumably the same thieves had been foiled in an attempt to steal the vehicle via locks and other security measures.

According to the company, LoJack is the only theft recovery system that is directly operated by law enforcement with an “interface [that] is seamless and instantaneous.” For this theft, the local police department and investigators with the BATTLE Auto Theft Task Force picked up the silent LoJack homing signals through LoJack Police Tracking Computers (PTC’s), which are installed in patrol vehicles and aircraft.

The LoJack transponder allows police to set aside standard investigation tactics and helps to minimize the risks to officers as crime scenes can be monitored discretely without betraying the police presence to the thieves. In this particular incident, the perpetrators were not apprehended.

Courtney DeMilio, associate vice president of LoJack Commercial, presented a picture of the extent of the construction vehicle and equipment thefts. According to a LoJack Study on Heavy Construction Equipment Theft in 2011, 87 percent of the most stolen/recovered equipment consisted of light utility/work trucks and trailers; skid steers; backhoe loaders, skiploaders, wheel loaders, and rack loaders; and generators, air compressors, and welders.

Towable items, especially those affixed to trailers, are much easier to take and because they are essential and popular items found on job sites, very susceptible to theft.

The following list highlights the most sought after items in terms of theft, according to the NER 2012 Theft Report:

1. Skid Steers

2. Mower, riding or garden tractor

3. Backhoes

4. Loaders

5. Tractor, wheeled or tracked

“Professional crime rings are behind equipment theft, as well as internal theft issues,” said DeMilio. “It’s a high profit, low risk crime. The average value per-machine is high (around $40,000 on average) and the penalties are relatively weak. Such thefts are made easier because titling and registration of equipment is not mandated, product identification numbers (PINs) are not standardized and the industry overall, has poor physical security; remote, frequently unsecured jobsites; ’open’ cab machines; and one key fits all ignition systems.

“Theft is difficult to detect,” she added, “due to weak inventory control on sites and exposure in unsecured areas, relatively easy to change identity of equipment (removal or switching the PIN), and no unique identifiers such as license plates — ’APB…Be on the lookout for a yellow bulldozer …’”

DeMilio added that because it’s not uncommon to see heavy equipment parked along roads, highways and construction sites, such vehicles are not suspicious and can be hidden in plain sight.

One security measure that many take is parking vehicles overnight in long, tightly packed lines, but as noted by DeMilio, this and other measures may not be sufficient. Another is the use of fenced-in areas.

“When one steals a piece of heavy equipment like a backhoe,” she said, “you can do side jobs and basically just built yourself a business and at the same time, are putting someone out of business. The loss of a backhoe for some could eat up the entire profit margin of their job. Theft impacts large and small companies alike.”

“What is more debilitating is that the company still has to pay the operator for the missing machine and impact the completion date,” she added. “Businesses are hurt on so many levels.”

Concerns about some employees stealing from their employer can be legitimate.

“It is very common,” said DeMilio, “and they already know how to use the machine and where it was left. It’s not always internal theft, but it is a true part of the problem.”

Long weekends such as the Labor Day are perfect times for thieves due to the three-day weekend and the delay in the reporting of thefts — if a theft occurs on a Friday night, the thieves would have a three day head start if it is reported on the following Tuesday.

“At first this made us quite nervous because the lead time is great,” said DeMilio, “but we didn’t understand what our success would be in recovering stolen units. We’re very successful because we have learned that on average, many units are only taken about 55 miles from the site of the theft and used to do side jobs.”

DeMilio pointed out that since the company was formed 27 years ago, LoJack has installed more then nine million units and has recovered more than 300,000 vehicles and pieces of equipment worldwide worth nearly $4 billion.

LoJack began supplying theft recovery systems to owners of construction vehicles and equipment, as well as commercial vehicles, in 2000. The result has been police recovering more than $209 million worth of construction equipment and busting up 80 plus chop shops and theft rings. DeMilio, who has been with the commercial division for nine years, has witnessed how the system is changing the environment.

The device itself, which can be warranteed up to seven years (it is recommended that it be tested every two years), is small and installed by LoJack crews discretely to avoid detection; and it is designed to withstand the rigors of the wear and tear that affect the vehicles and equipment they protect when fully utilized on construction sites.

“Our self-powered theft recovery system means that more equipment — like electric, solar-powered and towable assets — can now be protected,” says DeMilio, “and the system provides a recovery component to telematics asset management solutions or unmonitored fleets.”

The systems radio frequency technology enables LoJack Police Tracking Computers (PTCs) to detect signals and penetrate buildings unlike other technologies that may require a line of sight to a satellite. On average, a LoJack PTC can pick up a signal from a LoJack device 12 to 20 sq. mi. (31 to 52 sq m) away on the ground and even further in the air.

In the areas where LoJack devices are offered, nearly 14,000 police cars, helicopters and fixed-wing aircraft are outfitted with LoJack PTCs.

“We find that high concentrations of thefts occur in all of the bordering states and those with the highest levels of development,” said DeMilio. “We’ve identified the 25 high theft states and Florida, California and Texas are the leaders.”

LoJack devices are used by companies of various sizes, who do not place warning signs about their use as the recovery system. This covert installation makes it difficult for thieves to detect which vehicle or equipment has LoJack or not and can help with recovery.

A single LoJack unit costs about $700 to install and operate, but that is a one-time fee for the life of the device.

“There are no other fees and that is the key because people are investing in sophisticated systems that can have high monthly costs,” said DeMilio, who noted that its installation cost can be deducted as a capital cost for the piece of equipment.

Moreover, insurance companies have recognized the value of the LoJack device and offer discounts on insurance rates.

“They consider us one of the highest measures,” saidDeMilio, “so depending upon the company, there are deductible waivers and discounts that are offered.”

She explained that recovery times for a protected vehicle vary, but for over-the-road vehicles after the LoJack has been activated, recoveries typically occur within four hours and nine hours for heavy equipment. DeMilio said that some construction vehicles and equipment are stolen for export purposes, especially for use in countries where natural disaster has recently occurred.

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