Tackling That Old Industry Thorn: Theft - Equipment Theft
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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SECTION: Equipment Theft

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Tackling That Old Industry Thorn: Theft

By Loretta Hall

Article Date: 04-01-2008
Copyright(C) 2008 Associated Equipment Distributors. All Rights Reserved.

For years, stealing equipment has been profitable for thieves. But dealers, owners, and cops are fighting back with encouraging success.

Any way you look at it, construction equipment theft is a big problem. Since the National Equipment Register (NER) began collecting data in 2001, it has accumulated reports on 85,000 equipment thefts. Only 10 to 15 percent of those pieces are ever recovered. A 2005 survey conducted by Cygnus Business Media found that nearly three-fourths of equipment owners had experienced theft in the prior five years, and two-thirds of them never got their stolen equipment back. Even those who recovered their equipment weren't exactly lucky: two-thirds of them got it back damaged.Several factors make equipment theft easy and profitable. Dealers and contractors are finding tools and strategies to attack each of them. Easy to TakeUniversal keys make life easier for equipment operators, but they're handy for thieves too. "All you've got to do is go to the dealership and buy a key, no questions asked," said Leon Kothmann, executive director of the Texas Rental Association (TRA). A thief can even buy them on eBay, where a skid-steer key goes for $4.Some manufacturers are addressing this problem. "Bobcat has had keyless entry for several years," said Kothmann. "It's great. You can set a different code every time you rent that piece of equipment, so one key doesn't fit all." To start a machine, the operator enters a password on a keyboard.Another example is Caterpillar's Machine Security System (MSS), which embeds universal keys with electronic chips, each containing a unique code. The keys will start any unprotected Cat machine, but a machine equipped with MSS will start only with keys it has been programmed to recognize. The system is available as a factory-installed option or as a retrofit for many models.Unsecured jobsites, often in remote locations, also make equipment easy to steal. According to a 2005 LoJack study, 73 percent of owners had equipment stolen from jobsites, compared with 33 percent who had equipment taken from storage facilities or yards. Hiring security guards to patrol the site at night and on weekends can get expensive. Alternatively, a new Ingersoll Rand mobile security system provides video surveillance on construction sites and equipment yards. Its camera is activated by a motion detector, and it can be operated remotely via wireless communication.GPS tracking systems let owners surround a machine with an invisible, electronic boundary. If the equipment crosses that boundary, the owner is notified immediately. "The virtual fence could be set as small as the size of the equipment itself, or as large as, say, all of North America," said Michael Baker, senior director of North American sales for QUALCOMM Enterprise Services' equipment group. "Most people try to use them within the parameters of their work site. Or in the case of a rental company, they may want to tie it to a metroplex area." He adds that the boundaries are easy to redefine through a Web interface."Theft protection is only a small piece of what we provide," Baker explained. GPS systems typically track a machine's hours of operation, primarily for usage records and maintenance scheduling. "But when you talk about other aspects of return on investment," he said, "the direct theft protection part becomes some of the additional sizzle that you're able to get."Even something as simple and inexpensive as "circling the wagons" can deter thieves. Surrounding smaller pieces with larger ones parked heel-to-toe can send culprits in search of easier pickings. Easy to HideHiding a stolen machine is as easy as parking it with other pieces of yellow iron. "What the crooks are banking on is that they're going to blend in with everybody else," said Mike Smith, sales manager for Coastline Equipment, a John Deere dealer in Long Beach, Calif. "A lot of our customers paint their machines different colors. Maybe they'll have a dark green roof on the machine or maybe they'll paint the loader bucket bright red.""Tracking devices is what has probably helped us more lately on recoveries than anything," said Kothmann. Besides alerting owners when a piece of equipment has left authorized territory, a GPS tracking device can signal its location while it is being transported and, in some cases, while it is hidden. Theft protection may be a secondary use of GPS monitoring, but it is effective. Longview Advantage reports that over 95 percent of the stolen equipment protected with its asset protection system is recovered.GPS relies on line-of-sight communication to satellites, though, so it will be blocked if the equipment is inside a building or a truck. However, in January 2008 QUALCOMM introduced GlobalTRACS Lite, an asset management tool with a new twist: assisted GPS that utilizes the cellular network and enables tracking even in indoor locations."An external antenna can tell a thief that a machine has a GPS device, enabling him to remove or disable it. Baker says QUALCOMM's GlobalTRACS system can use a flat antenna hidden behind fiberglass, foam or leather. The more compact Lite version uses an internal antenna, making it easier to conceal.LoJack, another popular tracking system, uses different technology. When a protected piece of equipment is reported stolen, its information is entered in the National Crime Information Center (NCIC) system. This activates a device hidden on the equipment, and it begins transmitting a silent, radio frequency signal that can pass through walls. Police in 26 states and the District of Columbia have LoJack-supplied monitors to track the signals. "We target the highest theft markets and the highest population markets," said Kathy Kelleher, LoJack's commercial division vice president."Typical recovery time for construction equipment is about four hours," Kelleher said. In 2007, 71 percent of LoJack-equipped construction equipment was recovered in less than 24 hours.Smart thieves give themselves plenty of time to hide their prizes by taking them on weekends. "Every Monday we are busiest because that's when people realize that their equipment's stolen," Kelleher said. "That's when we're busy making sure that it was reported correctly and staying on top of it." Easy to SellLack of licensing or registration requirements for construction equipment make it easy for thieves to sell stolen equipment. Sales can be finalized with a handwritten bill of sale. Stolen equipment might be listed on any of several databases maintained by manufacturers, dealers, law enforcement, or registry associations, so checking a used machine's history before purchasing it has been cumbersome.Since 2001, NER has provided nationwide law enforcement access to a voluntary equipment registry. As of mid-2007, that database can also be used by equipment buyers for a nominal fee by phone or online at ironcheck.com. "If a contractor is at an auction and they're looking at a five-year-old machine, they can run it through our system," said NER senior analyst David Mossman. "We'll tell them what kind of history there is on it, particularly for theft, or if there is financing on it."Easy to Get Away WithFor years, thieves have been attracted to construction equipment because of the low rate of recovery. Recovery is increasing markedly now, in part because of tracking devices, but also because of programs that increase the effectiveness of law enforcement."The recovery rate goes up when you have people who understand what they're recovering," Smith said. The Crime Prevention Program of Southern California (CPP), of which Smith is a board member, works to correct that. "We put on seminars to educate law enforcement," said CPP's executive director, Earl Gunnerson, "because the vast majority of the guys don't know what to look for on a piece of equipment, and they probably don't think it's going to be stolen.""We do 20 to 25 law enforcement education programs throughout the country each year," Mossman said. In addition, NER cooperates with the FBI-affiliated Law Enforcement Executive Development Association (LEEDA) to conduct 10 regional Equipment Theft Summits each year that bring owners, dealers and police officers together. "We try to educate both sides, not only about what they can be doing more proactively about the theft problem, but also to get an understanding about the barriers that are facing the other side," Mossman said. "Law enforcement works on incident, not on value. A break-in at a branch where $500 worth of quickie saws were stolen is just as significant as the $100,000 piece of equipment that's stolen off the side of the road." Reporting incidents of vandalism or minor break-ins establishes a pattern of illegal activity, so the police won't see an equipment theft as an isolated incident.Supporting law enforcement efforts has proven to be effective. A few years ago, TRA gave $25,000 to a four-county task force in the Dallas-Forth Worth area so officers could go to construction jobsites and check equipment PIN numbers. "We found a lot of stolen equipment," Kothmann said. "One day, they picked up six stolen skid-steer loaders from one jobsite. After similar grants to other task forces, Texas' theft rate is the lowest Kothmann has seen in the last eight years. "We put so much heat on these theft rings that they have moved to other states," he said. "And we caught a lot of these guys. Some of them are behind bars."Texas has been one of the highest theft states in the country. Part of the reason may be its border location. "Nobody knows how much stolen equipment goes across the border," said Sergeant T.J. Salazar of the Houston Police Department. "[From] just one theft ring we worked on we recovered about 72 pieces. How many [others] were able to go across?" Part of the problem is that U.S. Customs exodus inspectors don't work nights or weekends. If someone does get caught taking a machine across the border without declaring it for export, all he faces is an administrative fine. "The priority for U.S. Customs is people coming in, not vehicles going out," Salazar said. "Once heavy equipment goes across, for the most part, it's gone."A major breakthrough came in November 2007 with the formation of PIT-TIP (the acronym reflects the Spanish and English translations of Transborder International Police). Salazar, one of the prime organizers of this partnership between Mexican and U.S. law enforcement, says its main focus is networking. "Friendships will grow," he said. "When you have a transborder crime, it will facilitate the investigation because you know your counterpart." Dealer OptionsEquipment dealers have long-term relationships with their customers, so many of them try to help those customers protect their assets. "We put a nonremovable CPP reward decal on each machine we sell, and we die-stamp it with my driver's license number in three locations," Smith said, explaining that California law enforcement officers recognize the format of the driver's license number and will use it to contact him. "Customers may stamp their identifier in additional locations," he adds, "maybe a little bit more hidden and harder for thieves to see.""If a machine is stolen, our customer calls in and I get the call," Smith said. "I get the information to John Deere and I contact law enforcement." He advises each dealer to have a person designated to handle theft reports from customers.Rental equipment is especially vulnerable. Thieves use false identities to rent equipment, impersonate rental company employees sent to retrieve equipment, or watch for lax security while machines are being transported or left at jobsites. Renters don't have a large investment in rented equipment and they aren't counting on it for long-term use, so they may not take security as seriously as owners. However, "Our customers are responsible for our equipment while in their possession," said Chad Matter, district manager of RSC Equipment Rental in Houston. RSC offers an LDW Assurance plan that can supplement a renter's own insurance. "Customers who elect this are covered for 75 percent of equipment replacement value in the event of loss or theft," Matter said. "Certain conditions apply.""One major initiative we have taken is the implementation of keyless start," Matter said. "We assign a code based on the last six or seven digits of the rental contract. The code becomes the ‘key' to that machine for that particular rental." Not only has this deterred theft, but it has also greatly reduced the number of service calls due to lost or misplaced keys. RSC also installs kill switches on selected categories of equipment and reminds customers to use them. And RSC sends renters of certain types of equipment a "theft letter." "This letter describes the problem at hand and offers additional theft prevention measures," Matter said. Progress"Until you have experienced the pain of theft or know somebody who has, it's really hard to understand that it's not just the value of the equipment. It's the time, the job costs," Kelleher said. "A stolen piece of equipment can shut a job down, and you can miss deadlines, which are costly."The direct and indirect costs of equipment theft add up to about $1 billion a year in this country. But all the prevention and recovery schemes and technologies are paying off. According to California Highway Patrol statistics, for example, equipment theft recoveries increased from 30 to 46 percent between 1996 and 2007. CPP reports that their members who properly mark and decal their equipment average a 75 percent recovery rate.Higher recovery rates discourage thieves. In a Houston-area case, a tracking device mounted on one piece of pilfered equipment led police to a $1.3 million recovery. "We got back dozers and backhoes and skid loaders and air compressors from a lot of companies," Kothmann said. "We've had about four or five of those size recoveries where we've been able to nail the kingpins in some of these rings. Since we had that one big bust in Houston, theft has just about dried up down there."
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