Focus on Equipment

September/October 2009

Crime Stoppers

Contractors adopt multiple strategies to control jobsite equipment theft and improve recovery rates

By Debra Wood

A LoJack tracking device led authorities to a construction-equipment chop shop. (Photo Courtesy of Lojack Corp.)

Thieves annually steal millions of dollars of equipment, resulting in job delays and financial losses for contractors.

The National Equipment Register of New York, an Insurance Services Office (ISO) company dedicated to reducing theft and increasing recovery, estimates equipment-theft costs vary from $300 million to $1 billion annually, not including business interruption or short-term rental costs. NER adds that as little as 6.5% of the stolen equipment is recovered.

Thieves seem to prefer newer machines. In 2006, 88% of the stolen equipment reported to NER was manufactured after 1999. Skid-steer loaders account for 34% of stolen machinery, backhoe loaders 17% and tractors 13%, according to NER. Most machines were taken from jobsites.

Texas, Florida, California, North Carolina and Georgia accounted for 31% of all thefts. Those five states also had high construction activity, at least in 2007.

A police officer uses the LoJack Police Tracking Computer to locate a stolen piece of equipment. (Photo Courtesy of Lojack Corp.)

“It is too soon to tell if there is or will be an uptick in thefts due to the economic climate,” says Ryan Shepherd, NER operations manager. “Theft could be down because there will likely be fewer machines out on unsecured jobsites.”

On the other hand, Shepherd says, fraud could go up, so more machines could be burned or have electrical fires.

From common-sense tactics and low-tech locks to high-tech global-positioning systems and radio-frequency recovery programs, contractors have taken different approaches to prevent theft or recover pieces of equipment after an incident. NER recommends a multifaceted, risk-management strategy to prevent thefts.

Alabama AGC has partnered with BulletProof Electronics of Bradenton, Fla., to develop HeistProof, a digital electronic key-and-lock system that allows only an authorized user to start the machine.

“We are sold on the technology and the ability of this equipment to stop construction theft,” says Henry T. Hagood Jr., executive director of Alabama AGC. “If you cannot pick up the equipment and physically move it, you cannot steal it.”

The system uses radio-frequency identification to recognize authorized drivers. “It interrupts the ignition system, and you cannot start anything unless the key and 80-bit digital code says it’s OK,” says Reed Mapes, founding partner of BulletProof .

HeistProof units start at $695 retail, with monthly monitoring fees starting at $32.95 with discounts for multiple units.

NER suggests contractors take small equipment off the jobsite and leave equipment on the ground, not in a trailer, in secured, well-lit sites. Shepherd recommends mechanics remove battery cables, fuses, relays, ignition circuits or tires on machines that cannot be moved.

The Equipment Lock Co.’s Backhoe Lock prevents anyone from turning the steering wheel. (Photo Courtesy of The Equipment Lock Co.)

The National Insurance Crime Bureau, Des Plaines, Ill., suggests installing hidden fuel-shut-off systems and clustering equipment that cannot be moved into “wagon circles,” with more easily transported machinery, like compressors or generators, in the middle surrounded by the larger equipment.

NICB says locking devices also deter thieves. Hydro locks can fix the wheels and prevent the equipment from traveling in a straight line, and sleeve locks fix backhoe pads in an extended position, forcing the wheels off the ground.

The Equipment Lock Co., Winchester, Va., and LockMasters USA, Nicholasville, Ky., sell a variety of anti-theft devices. Equipment Lock uses high-security barrel keys; prices range from $24.50 to $229.50, depending on the product.

“We are a means of theft prevention that mechanically locks the drive controls of heavy equipment,” say Bryan Witchey, vice president of Equipment Lock. “It’s simple but effective.”

LockMasters offers custom ignition switches to deal with the problem of machinery typically equipped with the same key, as well as secret on-off switches.

New secret on-off switches start at about $18 and custom switches cost $32. The company offers bulk discounts. The foreman turns the switch on at the start of the day and disables the ignition at day’s end.

NER suggests designating an employee to check the site on weekends and holidays and report any loss quickly and accurately. Also, let staff know that management will make spot checks, ask security guards to notify the appropriate person about suspicious activity and provide police with contact information and any planned after-hours activity.

The HeistProof radiofrequency device allows a piece of equipment to turn on only for an authorized operator. (Photo Courtesy of Heistproof)

NICB recommends keeping records of equipment purchases, photographing machinery and placing an internal control number on it. Registering fleets with NER’s HELPtech program can aid in recovery. A national database, it is similar to a department of motor vehicles system for construction equipment, and it is accessible to law-enforcement officials after a theft.

“By providing supporting data to police on ownership and theft history, NER helps law-enforcement officials recover stolen equipment,” Shepherd says.

Several GPS systems allow contractors to set up virtual geo-fences. If a machine equipped with a device leaves the area or is turned on at a time when the contractor has told the system it should be off, the software will alert the appropriate person.

Flatiron Construction Corp., Longmont, Colo., a member of Colorado Contractors Association, is using Qualcomm’s GlobalTRACS system on the $214-million Tampa Airport Interchanges project for the Florida Dept. of Transportation.

“We use the geo-fence whenever possible to make sure our equipment stays on our job,” says Warren Schmidt, corporate equipment manager for Flatiron. “It has helped us recover and prevent [loss]. There were quite a few instances where we would have lost equipment.”

Flatiron has stopped a theft in progress and in other instances told law enforcement where to pick up stolen equipment based on GPS data. Qualcomm no longer sells GlobalTRACS directly to businesses and could not provide current pricing. Topcon Tierra, a joint-venture company of Topcon Positioning Systems, Livermore, Calif., and DIVITECH S.p.A. of Italy, will assume maintenance and service of some customers. New pricing was not available at press time.

A LockMasters USA secret on-off switch replaces a standard ignition switch. (Photo Courtesy of Lockmasters USA.)

Crossland Construction Co., Columbus, Kan., has recovered a stolen mechanic’s truck using The Dispatcher Resource Management Software from HCSS, Sugar Land, Texas. A single, stand-alone copy of The Dispatcher costs $4,000, with discounts for multiple users.

The radio-frequency theft-recovery system offered by LoJack Corp., Westwood, Mass., also helps with recovery and is not affected by satellite or cell-tower site lines. Each LoJack unit has a unique identification code. If stolen, police enter the report in the crime computer, which activates the LoJack by radio frequency. Police can then track the signal from the vehicle and recover it. In 2008, LoJack recovered more than $15.5 million in stolen construction equipment. LoJack’s suggested retail price is $795, with no recurring monthly fees.

Certain insurance companies offer discounts for installing the recovery devices or locking systems. However, NER’s Shepherd says, more commonly, insurers may offer a deductible waiver if a machine with a recovery system is stolen.