This year, the trucking sector has encountered a rise in cargo thefts carried out by thieves using more advanced and strategic methods.
According to a report from Verisk Analytics’ CargoNet, released on July 18 during the second quarter, there was a significant 57% increase in “supply chain risk events” compared to the previous year. This resulted in a total of 582 reported incidents throughout North America, leading to a staggering $44 million worth of stolen shipments.
The report highlighted that a substantial portion of this surge was attributed to a specific tactical approach known as “shipment misdirection attacks.”
“We have clever criminals here, but it’s become more of a global problem in regard to the organized crime piece,” said Keith Lewis, vice president of operations at CargoNet. “When they steal by fraud, use the internet and use surrogates to do their dirty work that don’t know they’re involved in a crime, they can do it so much easier and so much faster. And now they can target and hit, with a bull’s-eye, high-value commodities.”
The tactic of shipment misdirection attacks involves exploiting lawful procedures such as load boards to deceptively acquire cargo. The criminals might impersonate a genuine motor carrier or logistics broker to secure a load. However, instead of transporting it themselves, they relist it on a load board, aiming to engage a legitimate driver to transport the cargo to another location. The ultimate objective is to pass the load through several drivers and warehouses in a manner that effectively conceals its illicit origins, essentially laundering the stolen goods.
“They’re washing that load, just like washing dirty money,” Lewis said. “There are warehouse receipts generated, so when it’s shipped out, a new bill of lading is generated. Now you have a legitimate bill of lading showing from Fontana to San Bernardino. So if the driver gets stopped, he’s got a legitimate bill of lading.”
According to a first-quarter report from the risk management firm Overhaul, cargo thefts witnessed a year-over-year decline of 14%, totaling 142 incidents. However, when compared with the previous quarter (Q4), there was an 11% increase in cargo thefts.
The report highlighted that electronics, along with food and beverage, were the most frequently targeted types of cargo. These goods faced a higher risk of theft compared to other types of shipments during the mentioned period.
“We do have a very active and diverse network of law enforcement contacts throughout the country that are specifically focused on cargo theft and cargo crime,” Danny Ramon, intelligence and response manager at Overhaul, said during a July 25 webinar. “We’re seeing a lot of strategic thefts. We’re seeing those spread, not just only in volume, but they’re also growing in geographical area.” Ramon noted that strategic thefts used to be primarily concentrated in Southern California, but he said the tactics are now spreading east.
Scott Cornell, transportation lead and crime and theft specialist at insurance firm Travelers, has also seen strategic thefts spreading into new areas.
“Strategic theft is very difficult for the industry to deal with because the thieves are at arm’s length,” Cornell said. “They’re nowhere near where the theft happens. They perpetrate the theft from a distance online, by phone, things like that. With straight theft, there’s more at risk for the thief because they’re on location.”
At the beginning of this year, Truckstop, a load board, and freight management company, introduced a campaign with the purpose of combatting cargo theft by encouraging the exchange of information. As part of this initiative, they launched a weekly web series titled “Fraud Prevention Friday.” The series is aimed at raising awareness about fraud prevention and providing valuable insights and strategies to help prevent cargo theft incidents in the industry.
“We saw freight fraud increase dramatically in October of 2022,” said Brent Hutto, chief relationship officer at Truckstop. “We saw [complaints] increase about 400%, and they’ve stayed at that level since October of last year — they’ve continued on all the way through. What CargoNet is saying about seeing a 57% increase is accurate. But what we’ve seen month-over-month — from June to July — we’ve seen about a third drop from this super-high level.”
Hutto highlighted that the decrease in freight rates played a role in the increase of cargo thefts. When freight rates are low and available cargo becomes scarce, carriers are more inclined to accept loads without conducting thorough investigations. Criminals take advantage of this situation by posting fraudulent loads offering higher per-mile rates, which makes them more enticing to carriers who are eager to make better profits. As a result, carriers may be less cautious in verifying the legitimacy of these high-paying loads, making them susceptible to falling victim to cargo theft schemes.
“The stats of attempted and successful thefts do not paint a pretty picture,” said Zak Bowyer, vice president of sales support operations at Total Quality Logistics. “From an attempts standpoint — the industry is seeing more cybercriminals conducting ‘strategic cargo theft’ or ‘fictitious pickup’ schemes online by impersonating legitimate parties through forgery and identity fraud. Without proper resources, these attempts can be very hard to identify. Right now, California is the center of activity, but it has cropped up at an alarming rate in other states.”
