LA freight train looting 'out of control' as thieves worsen supply chain bottlenecks
The scene in Southern California resembles a disaster movie — only it's not.
Thousands of boxes littering Union Pacific (UNP) train tracks in downtown Los Angeles attest to a wave of rail thefts that have taken place in recent months — worsening supply chain bottlenecks and creating endless delays for consumers and merchants that likely cost millions, if not more.
L.A. has been a hub of major shipping woes in recent months, with the ports of Los Angeles and Long Beach a prominent fixture of global supply bottlenecks. The twin hubs handle about 40% of the nation’s maritime imports, with the majority of nearly $450 billion worth of goods eventually moving by rail.
With retailers seeing a wave of "smash and grab" thefts, rail heists are now taking center stage in the latest problem dogging the industry. Over the weekend, Yahoo Finance saw several scavengers picking through the sea trash, hoping to find valuable goods like electronics, clothes or whatever items thieves left behind.
Thieves have been raiding cargo containers, taking packages that belong to people from all over the country from retailers like Amazon (AMZN), Target (TGT), Macy’s (M), Skechers, and others, leading to viral images on social media. Data from the National Retail Federation found that the average loss from organized crime topped $700,000 per $1 billion in sales in 2020.
Some of the refuse left behind included pills, dermatology products, home decor which robbers didn’t want, or simply didn't believe were valuable enough to take.
On Saturday, Yahoo Finance found several packages, and upon entering the tracking number information found they were marked as “on the way – delay.” One was addressed to Oregon State Police from BPS Tactical Inc., a custom Law Enforcement gear company.
Yahoo Finance called and sent photos to the officer and the company about their missing package.
"It's really frustrating and these criminals are just taking over and they rip the box open and take what they want," Sarah Blankenship, vice president of BPS Tactical, said in a phone interview.
Blasting the thefts as "out of control," she demanded "consequences for stuff like this. It just makes me mad that something we made that costs money and people work hard to make and the trooper is not getting his equipment that he needs, because somebody helped himself to something that they shouldn't be taking."
Blankenship said they were sending an exterior vest that was worth over $500 to a trooper in Oregon, but explained this experience had has never happened before, and luckily all their packages are insured.
"I feel like the only thing that's going to change, this is what happens to the criminals and the consequences of what they should be facing for doing these type of things. They need more manpower to enforce it," she told Yahoo Finance.
"We won't change the way we send stuff because we'll still have to go through the same procedures, but we will definitely be following up with our customers more," she added.
UP grapples with a staggering surge in thefts
The robberies appear to be a byproduct of a widespread breakdown in pandemic-era public safety, which has bedeviled officials across major cities — and not just on the West Coast. In New York City, businesses and citizens are in open revolt against Manhattan's newly-elected District Attorney Alvin Bragg, amid plans to downgrade or simply not prosecute certain crimes.
Union Pacific, the railroad company operating the cargo trains, had cleaned up the area of tracks where the boxes were found three months ago, and again about 30 days ago, according to CBS-Los Angeles reports.
The company said it has experienced a surge of over 160% in criminal rail theft in L.A. County since December 2020, and that on average, more than 90 containers were compromised each day.
For several months during that period, the increase from the previous year surpassed 200%, according to UP data. For the month of October 2021, it estimated the increase to be over 356% compared to the year before.
According to LAPD data through November 27, property crime was up 2.6% over the same period last year, but is actually down 6.6% from 2019.
However, the train thefts have created quality of life issues bad enough to make a Los Angeles Councilman, Joe Buscaino, declare UP's railroad’s properties within Districts 15 and 8 a public nuisance based on dumping, trash and encampments near tracks.
On Saturday afternoon, 17 cars of a UP train derailed in Lincoln Heights. Sources with knowledge of the situation told Yahoo Finance that thieves are deliberately causing these derailments as a method to slow down the train, and allow them to rob cargo containers.
Officials say they are working on clearing the tracks following the derailment; nobody on the train was hurt and the cause is under investigation.
While Yahoo Finance was on the scene with cameras, three people were seen walking off with boxes of goods, and a UP officer was spotted with a man handcuffed.
The train company has stepped up the number of special agents on patrol, and was exploring the use of tools like drones, specialized fencing and trespass detection systems, a representative told Yahoo Finance.
Keith Lewis, Vice President of Operations at CargoNet, a Verisk business that tracks cargo thefts, told Yahoo Finance that there’s often a delay in reporting stolen goods.
“We have a significant delay in reporting of these incidents because they may happen on a Thursday or Friday, and they may not be realized until Monday,” said Lewis. “The bad guys have two or three days to get away with the product, move it, repackage it, put it in a different trailer, sell it."
Lewis also noted it was still unclear why there has been more rail theft in recent months.
“I don't know what's causing the uptick other than the freight sitting more than it has been," he explained.
In a letter to L.A. County District’s Attorney George Gascon, Adrian Guerrero, UP's director of public affairs, called the looting a "spiraling crisis" that's forcing the company to weigh re-routing trains away from L.A.
Guerrero explained that more than 100 people have been arrested — but thieves “boast to our officers that charges will be pled down," and are released within short order.
In response, Alex Bastian, an advisor to Gascon, said some cases presented to their office by the rail company have been filed in burglary and grand theft, but other cases don’t have enough evidence to prosecute.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv
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