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Strategic Tactics Drive Cargo Theft Rise

CargoNet Found in the Second Quarter That 'Supply Chain Risk Events' Increased 57% Year-Over-Year

The trucking industry has faced an increase in cargo thefts this year, with thieves developing more sophisticated and strategic tactics.

Verisk AnalyticsCargoNet in a second-quarter report released July 18 found that "supply chain risk events" increased 57% year-over-year, with 582 reported incidents across North America. This accounted for over $44 million in stolen shipments.

The report noted that much of the increase was attributable to a type of strategic 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 shipment misdirection attacks use legitimate processes like load boards to fraudulently obtain cargo. The criminals may pose as a legitimate motor carrier or logistics broker to get a load, only to turn around and put it back on a load board to get a legitimate driver to carry it somewhere. The goal is to pass a load through multiple drivers and warehouses to essentially launder it.

“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.”

Risk management firm Overhaul found in a first-quarter report that cargo thefts decreased 14% year-over-year to 142 but rose 11% compared with Q4. The report also found that the most targeted cargo types were electronics as well as food and beverage.

“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.”

Earlier this year, load board and freight management company Truckstop launched a campaign aimed at fighting cargo thefts through sharing of information. The initiative includes a weekly web series called "Fraud Prevention Friday."

“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 pointed to declining freight rates as a contributor to the rise in cargo thefts. When rates are low and cargo more scarce, he said, carriers are less likely to thoroughly investigate potential loads. This is especially true when a criminal posts a fraudulent load with a higher per-mile rate.

“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.”


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