A Tight Ship

September 1998


A Tight Ship

Shipping thieves are getting slicker, say security and law enforcement experts, but you can outfox them

FBI statistics say transit theft exceeds $10 billion annually, more than three times what it was a decade ago. The thieves are better organized and equipped, more sophisticated, more violent and more numerous than ever before. In our own industry, the statistics are no better. About one-third of all the losses Jewelers Mutual Insurance Co., Neenah, WI, pays involve lost or damaged shipments.

Investigation of this so-called transit crime and enforcement of antiquated transit theft laws is sporadic. Criminal penalties are weak – many convicted transit thieves never serve jail time. While there are federal legislative efforts under way to beef up enforcement of and criminal penalties for transit crimes, your best defense is careful preparation before shipping anything.

When shipping, don't draw attention to your package. Millions of packages are shipped annually, and the vast majority are not stolen or tampered with. So figure out why thieves pick the packages they do. Jewelry is a prime target because it's small, valuable and easy to resell. Anything about your package that suggests it contains jewelry greatly increases the chances it will be stolen or tampered with.

Proper Packaging
You are safer using a box no smaller than a shoe box, advises Jewelers Mutual in its "Good Box" guide. The insurer suggests you first put your item in a strong cardboard jewelry box and then tape that to the inside of a larger box. It's important the inside box not rattle around. Tissue or packing material will make the larger box seem less empty and give it more weight. Never ship jewelry in an envelope or folder.

Seal the outer shipping box with gummed, reinforced paper mailing tape or pressure-sensitive shipping tape. (One company that sells such security seals and void tapes is Consolidated Graphics Materials Inc., Somerset, NJ, 732-448-1400.) However, the Jewelers' Security Alliance reported earlier this year that large jewelry shippers say more sophisticated packaging materials simply flag your packages for those who want to steal them. They are a real defense, however, against sneak thieves who want to filch the contents of package and leave it looking untampered with.

Large-scale jewelry shippers also advise that you should never reuse boxes or use the boxes provided by carriers because both of these practices could increase the risk of theft by making the boxes more noticeable.

Documented Shipping Procedures Claims can be hard to prove unless you're prepared. If a loss occurs, you have to substantiate it. If your package arrives empty, damaged or different than what you packed, you'll have to prove what you said was in the package was there. If it's stolen, you'll have to prove the value of the contents. This month's Managing Legal Issues column describes the legal ramifications of not properly documenting shipments (see p. 112).

The whole packaging game relies on your ability to disguise that what you're shipping is jewelry. Certain areas of major cities are known to be jewelry districts, and some addresses are known to house several jewelry companies. A high percentage of the shipping into or out of these areas is jewelry and thieves know it. Jewelers Mutual advises avoiding shipping to or from ZIP codes 10036 in New York City and 90013, 90014 or 90015 in Los Angeles. Use caution when using ZIP codes 60602, 60603 and 60659 (Chicago area) or 94102, 94103 and 94108 (San Francisco area). To avoid these ZIP codes, you can use an agreed-upon address such as a principal's home. For return addresses, if you are in one of these red-flag ZIP codes or if you have an address known to be in a jewelry district, use your home address or the address of your lawyer or accountant (with permission), advises the JSA.

You also may want to take the package to the carrier's shipping office rather than have it picked up, and pick up anything that's being sent to you rather than have it delivered to your store.

Another important aspect of addressing: never use any word that suggests jewelry is in the package. For a long time, organizations such as JSA recommended using initials to hide jewelry-related names. But thieves have learned this trick and it has become another red flag. Using people's names instead of company names or initials is one alternative.

High-volume shippers in the jewelry industry seem to agree that, for most purposes, the U.S. Postal Service's first-class registered mail is the way to go. USPS provides you with packing tape and will stamp the package several times with the registered mail ink stamp so the printed words overlap the tape and the package. Insurance coverage is available up to $25,000; you must declare the full value of the item being shipped.

The drawback to such postal service shipping is that it takes a few days. JSA and Jewelers Mutual stress that jewelers need to consider – each time they ship – whether overnight delivery service is critical. When it is, USPS Express Mail and Priority Mail are recommended. Insurance limits on Express Mail were recently raised from $500 to $5,000, reports JSA.

Use a variety of carriers and always change carriers after you experience a loss, even if only for a few weeks or months. Extremely valuable pieces should be shipped by armored services. Brinks is one such service, but there are others. When shipping extremely valuable pieces, split them into several packages. The odds are better that even if you suffer a loss of one package, not all of them will be stolen.

Never ship on weekends if possible. If something must be delivered on a weekend, make sure there will be someone to receive it. If a package has to be returned to a shipping depot and held for redelivery or pick-up, chances of it being stolen increase.

Adequate Insurance Coverage
In many cases, you will need additional shipping insurance above the amount you obtain from a carrier. Many private insurance policies offer such coverage. Jewelers Mutual provides coverage for shipping in three ways, says Darin Kath, vice president of underwriting:

  1. A jewelers block policy can provide permanent coverage for items you ship. The rate is based on several underwriting factors, including policy limit, deductible and loss history. This is probably the easiest coverage if you do a lot of shipping.
  2. If you don't have permanent shipping coverage on your policy, you can cover single shipments by contacting your agent. Kath says the rates for this coverage are competitive with other insurers and with the rates offered by shipping carriers. Individual rates are based on your loss history and location.
  3. If you have permanent shipping coverage on your jewelers block policy, but not enough to cover a particular shipment, you can obtain individual shipment coverage on top of your policy limits. The cost is based on where the shipment is going and your loss history.

Kath said more than half of the policies Jewelers Mutual sells have permanent shipping coverage.




Copyright © 1998 by Bond Communications.


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