As businesses have increasingly relied on global supply chains to transport goods and materials, the issue of cargo theft has become an ever-present concern.

Unfortunately, recent reports indicate that cargo theft is on the rise, and a growing number of businesses are falling victim to this dangerous trend. With sophisticated thieves employing strategic tactics to steal valuable cargo, companies must be proactive in protecting their goods and minimizing the risk of theft.

In this blog post, we will explore the rise of cargo theft on supply chains and the tactics being used by cargo thieves to target businesses.

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The Surge Report

The transportation sector has encountered a surge in larceny of goods this fiscal year, as perpetrators or cargo thieves have devised more intricate and methodical maneuvers to seize cargo.

The second-quarter report released by Verisk Analytics' CargoNet on July 18 revealed a substantial rise of 57% in "supply chain risk events" compared to the previous year. A total of 582 incidents were reported across North America, resulting in the loss of shipments worth more than $44 million.

Every trucking company and truck driver should be aware of this these types of cargo theft and the levels of cargo theft nowadays.

The report identified a significant proportion of this increase to be due to the implementation of shipment misdirection attacks, a strategic tactic employed by perpetrators to divert and steal cargo. This type of theft is becoming a trend.

What Do Data Experts Say

As Per CargoNet

According to Keith Lewis, the Vice President of Operations at CargoNet, the prevalence of sophisticated criminals has escalated into a worldwide predicament, particularly with organized crime.

Such felons perpetrate fraudulent activities by utilizing the internet and employing surrogates who are unaware of their involvement in the criminal act. Either via identity theft or straight theft, this mode of operation allows them to execute their schemes with ease and swiftness.

Furthermore, these criminals can now focus their attention on high-value commodities, targeting them with utmost precision.

The Types of Cargo Theft

The fraudulent practice of shipment misdirection involves the exploitation of legitimate processes, such as load boards, in order to illicitly acquire cargo. In this scheme, perpetrators may disguise themselves as bona fide motor carriers or logistics brokers, soliciting a load with the intention of subsequently posting it onto a load board for transport by a legitimate driver. The ultimate objective is to facilitate the passage of the cargo through multiple drivers and warehouses, effectively laundering it in the process.

According to Lewis, the current operation involves a process that parallels the laundering of illicit funds.

The process entails the generation of warehouse receipts, which are then used to create a new bill of lading.

This method ensures that the cargo is shipped out with a legitimate bill of lading that indicates a transfer from Fontana to San Bernardino. This strategy also serves to provide a driver with legitimate documentation in the event of a stop by law enforcement.

 These supply chain disruptions experienced by freight brokers, and distribution centers must require further background checks considering that there are already cargo theft incidents reported on data.

As Per Overhaul

In its initial quarterly analysis, the risk mitigation company, Overhaul, has noted a reduction of cargo thefts by 14% on a year-over-year basis, with the total number of incidents being recorded at 142.

However, there was a subsequent increase of 11% when compared to the previous quarter. Further investigation revealed that the most frequently targeted cargo types included electronics, as well as food and beverage. Each cargo theft report is impacting the cargo theft rates quarterly.

Danny Ramon, the Intelligence and Response Manager at Overhaul, emphasized during a recent webinar the extensive and diversified network of law enforcement contacts the company has established throughout the United States to target cargo theft and cargo crime.

According to Ramon, strategic cargo thefts are on the rise, both in terms of frequency and geographical scope.

While these incidents were previously concentrated in Southern California, they are now spreading eastward. Such developments indicate the need for heightened vigilance and proactive measures to protect valuable cargo containers or cargo loads and prevent potential losses due to a lack of cargo security.

 Cargo at rest is cargo at risk or more prone to cargo theft risk.

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As Per Scott Cornell of an Insurance Firm

According to Scott Cornell, who serves as the transportation lead and crime and theft specialist at the esteemed insurance firm, strategic thefts are increasingly becoming prevalent in new areas.

The challenge with such cargo theft events or cargo theft trends lies in the fact that the perpetrators are not physically present at the scene of the crime, making it difficult for the industry to effectively address the issue.

Cornell explains how these thieves operate remotely, leveraging online and telephonic means to execute their crimes. In contrast, a standard theft involves greater risk for the thief as they must be present at the location of the incident. Monitoring of fictitious cargo pickup should be monitored by every supply chain partners and freight owners in every shipping facility that the entire truck or delivery trucks will enter.

 This needs a proactive approach to security to every commercial vehicle involved is an essential element or one of the key factors to prevent cargo theft.

As Per Truckstop

In a bid to combat the rising issue of cargo thefts, Truckstop - a prominent load board and freight management firm - launched a strategic campaign earlier this year. Under this initiative, the company aims to share valuable information related to the subject, thereby empowering the industry stakeholders to safeguard their assets and interests.

As a part of this program, Truckstop has also introduced a weekly web series titled "Fraud Prevention Friday," which provides expert insights and practical tips to mitigate the risks of fraudulent activities.

This is great because risk profiles are discused. 

According to Brent Hutto, the Chief Relationship Officer at Truckstop, there has been a dramatic surge in freight fraud cases observed in October 2022.

Reports of these incidents have escalated by approximately 400%, a trend that has persisted since the same time last year. While the statistics provided by CargoNet regarding a 57% increase in these occurrences are valid, there has been a noticeable reduction in the frequency of these incidents from June to July, dropping by around one-third from the peak level recorded.

Hutto has highlighted the correlation between the decrease in freight rates and the increase in cargo thefts.

Due to the reduced rates and scarcity of cargo, carriers are inclined to be less diligent in scrutinizing potential loads. This is particularly accurate when a criminal puts forth a deceptive proposition with a higher per-mile rate.

 As Per Total Quality Logistics

According to Zak Bowyer, the Vice President of Sales Support Operations at Total Quality Logistics, the statistics surrounding attempted and successful thefts are concerning.

The transportation industry is experiencing a surge in cybercriminals utilizing online methods such as 'strategic cargo theft' and 'fictitious pickup' schemes through identity fraud and forgery.

These attempts are increasingly difficult to detect without adequate resources. Presently, California is the epicenter of such activity, but it has spread rapidly to other states.

Cyber security is a serious contributor to cargo loss and cargo theft occurences. More over, when take seriously, could be the key to stop cargo theft tactics, improve cargo tracking, and can be a general cargo theft prevention tool.

In Conclusion

In conclusion, the rise of cargo theft on the supply chain is a serious issue that requires attention and action.

The strategic tactics employed by thieves make it difficult for companies to protect their goods, and the cost of theft can be significant.

It is important for businesses to take proactive measures to mitigate the risk of cargo theft, such as implementing stricter security protocols and conducting risk assessments. By taking these steps, companies can help to ensure the safety and security of their supply chain, as well as protect their bottom line.

If you want to stay updated with the current trends in the trucking, freight, and logistics industry, stay connected to us.

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If you are looking for more information about drug and alcohol testing as a truck driver, visit LabWorks USA. Our DOT Consortium's friendly team will be more than happy to discuss any concerns you may have and work with you to ensure you are always fully compliant specially with random DOT drug and alcohol testing pre-employment testing. Moreover, if you need help with FMCSA Clearinghouse registration, we can further support you.