Hot iron

Contractors pride themselves on managing risk… except for one. Despite the value and importance of their machines, many leave themselves exposed to thieves and accept the occasional loss as part of the cost of doing business.

It is an expensive problem.

Some $400 million worth of equipment was stolen in 2010 in the U.S., according to the 2010 Equipment Theft Report published by the National Equipment Register (NER), Jersey City, N.J. As little as 19 per cent was recovered. Those losses do not include project delays, rental of replacement machines, lack of productivity, increased insurance premiums, penalties and other costs.

According to the 2009 Construction Theft Survey published by Boomerang Tracking Inc. in Canada, 46 per cent of respondents reported a theft on their job sites and some 63 per cent of stolen equipment was never seen again.

Stolen Steel
Why is it such a big problem? Thieves work on a strict risk/reward strategy, and construction machinery is good business. The stolen item is valuable, possibly worth hundreds of thousands of dollars.

“The strange thing is that across Canada, the number of thefts is coming down. The problem is that the value of the equipment being stolen has increased greatly,” says George Kleinsteiber, equipment theft consultant, Ontario Sewer and Watermain Construction Association (OSWCA), Mississauga, Ont.

That is a sign of growing professionalism among thieves.

“It is more prevalent in the major urban areas. You’re finding bolder thieves that come prepared with trailers,” notes Tim O’Brien, brand marketing manager, Case Construction Equipment.

Another factor is police cutbacks, according to Kleinsteiber.

“Many of the police agencies have disbanded their auto-theft units… very few police forces are devoting resources to investigating construction equipment theft rings.”

Police and courts lack the resources and expertise to pursue these crimes aggressively. Thieves know they are unlikely to be caught, let alone serve a significant sentence for a crime that did not involve violence. About the only bright spot is the fact that the Canada Border Services Agency has started to scan containers in ports in Montreal and Halifax before they are shipped abroad. Officers have recovered 476 vehicles worth some $14 million, according to CBSA.

The final enticement to thieves is that many contractors do not protect their equipment. The 2009 Construction Theft Survey revealed that:

– Only 59 per cent of owners keep records of their equipment.
– 40 per cent fence in their equipment.
– Eight per cent have an alarm on their equipment
– Six per cent have a tracking or recovery device.

Most of the experts we talked to for this research said that doing practically anything in terms of securing your equipment will make you a tougher target than the guy down the road.

Lights, camera, no action!
“You want to start with the simple, durable solutions first. Those are often overlooked, and they are the most effective,” says O’Brien.

The experts suggest:
– Keep records of all your equipment, including photographs.
– Make sure your employees understand how to secure machines properly.
– Register the machine with the manufacturer and organizations like NER, now active in Canada.
– Good fences, cameras, lighting, dogs and security patrols are strong disincentives to thieves.
– Work with the police. Find out whether you are operating in a theft hot spot. Ask for police patrols to swing by your site occasionally.
– Immobilize the machines. “With backhoe loaders, for example, they might use stabilizer locks. Other devices will lock the steering wheels, like they do on automobiles,” says Bill Sauber, manager of Remote Technologies, Volvo Construction Equipment, Shippensburg, Pa.
– Locking a machine down when it is not in use is an inexpensive, effective strategy, says O’Brien. “Make sure your compartments are locked. Lockable compartments make the machines easily accessible for maintenance, but difficult to access for thieves.”
– Bigger machines like bulldozers are hard to steal. Use them to block gates or obstruct smaller machines. Park machines to limit access, and so you can quickly see if one is missing.
– Use a vandalism protection kit. Besides protecting the glass, it limits access to the cab, says O’Brien.
– Turning off the battery actuator switch will make the machine impossible to start. “It’s a poor man’s anti-theft device. Without the key, you can’t start the machine,” says Chris Giorgianni, vice-president, product, JCB North America, Savannah, Ga.

Locking is key
Lock your machines when you are not using them.

“Keying has been a hot topic for a long time,” says Sauber. “Any time any manufacturer has tried to use different keys in a key system, the fleet owners have protested.” They question whether the risk of theft balances against the inconvenience of hunting up the right key for a machine, he says.

A number of manufacturers supply systems that recognize key codes, constraining the use of the machine in terms of location or times of use. One example is a sealed switch module that is available for some John Deere machines. “The SSM enables customers to set up security codes that must be entered before the machine can be operated,” says Paul Garcia, product manager, John Deere WorkSight Solutions.

Some Case machines have keyless starting, says O’Brien. The machine is protected by a four-button touchpad that lets the owner set security codes to keep machines safe.

In recovery
A telematics system, which normally provides a variety of useful data on machine condition and usage, can serve as a sophisticated recovery tool. Geofencing is a common function.

“If you’re in an area that has a high theft rate, or you just don’t feel right about leaving your equipment, set a curfew or geofence around that area. This will allow you to get alerts in real time when a thief is attempting to steal the unit,” says Garcia.

“The electronics on the new machines make them more difficult to steal and make it almost impossible to hide that fact when it happens,” says Sauber.

One Canadian customer recently bought a used machine, he explains, and he wanted it connected to his CareTrack system. The CareTrack unit hooks into the CANBUS system on the machine so it can communicate with the various electronic control units (ECUs) on subsystems, like the engine, transmission and climate-control systems. When everything was connected, they were in for a surprise. It turned out that the machine had ECUs from at least two other machines in it—some of which had originally been sold in Africa.

“We couldn’t even tell what machine it was, except by going in looking at the stamped number on the frame,” says Sauber.

Technicians were able to consult the Volvo database of identification numbers to identify the components that were involved. The incident highlighted the power of machine electronics, as well as the global nature of machine sales.

In another case, a demo machine was stolen from a customer’s job site, and the dealer had not yet activated the telematics package, says Sauber.

“I jumped online and activated the machine. It configured and started reporting in about two and a half minutes. By looking at the GPS System, I was able to give them the actual street address where the machine was located.”

Other major suppliers have comparable technology. For example, Deere’s JDLink system locates machines not just in North America but anywhere the sys
tem has coverage. JCB’s LiveLink enables an operator to determine a machine’s location and shut it down remotely.

“If a machine is stolen or is started after hours or leaves a predefined area, you can be emailed an alert,” explains Giorgianni.

Case has configured its CANBUS system to support a variety of telematics solutions. The ROI is impressive. When you buy insurance, you usually get a discount if you have a telematics system installed, says Sauber. “The technology is well-recognized and almost all insurance companies now offer healthy discounts for insurance on theft if telematics are used.”

Jammin’
Cellular and GPS jammers seem to be winning interest from thieves.

“I bought a jammer in England, just to see whether it worked or not. It worked really well,” says Kleinsteiber.

The downside is that the jammer has to be near the machine and turned on constantly. GPS and cellular technology is evolving in response, but that does not help if you have an older system.

Lojack Canada, which recently introduced a system specifically for construction equipment called Lojack C, welcomes jamming attempts, says Kevin Joy, general manager, Lojack Canada, Montreal. The system operates on a unique radio frequency. 
“There’s nothing else on that frequency… We actually welcome it when somebody has a jammer going. It’s like a beacon saying, ‘Hey, here I am! I’m stealing something!”

Lojack C is essentially a ruggedized, self-powered radio with a high-powered signal that can penetrate some structures and containers. It is installed in a hidden location and lies dormant until you report it stolen. Then a broadcast signal actuates it and it starts to emit a radio signal that the firm’s towers and investigators use it to track the machine’s position.

The math is convincing. If telematics or another recovery system deters thieves from taking your machines or helps recover them, they will have paid for themselves many times over.

Get tough
There is a correlation between investments in productive machinery and maintenance and investment in security.

“When I visit a customer who owns equipment that’s worth stealing and is looking after it properly, I usually see a yard that is well-lit and well secured, with security cameras and decent fencing,” says Sauber.

The good news? “If you put up the slightest defence, most thieves will walk away and go someplace else,” says Kleinsteiber.

Contractors have to worry about a thousand things a day, says Giorgianni. Theft proofing means there is one less. “It’s that peace of mind of knowing that when you open the window in the morning and look out, your machine is still going to be there.”

Jim Barnes is a contributing editor for On-Site.