No one thought it was possible for cargo theft to become a job that could be done remotely. But thanks to the digitalization of the supply chain and high-tech cargo theft tactics, crooks have found a way to do the bulk of the stealing without being onsite.
The data shows these tactics work. Strategic cargo theft costing carriers, brokers millions in freight in Q1 references Verisk CargoNet’s report that shows cargo theft went up by 46% year-over-year in the first quarter of 2024. Moreover, the average value of a cargo theft exceeded $280,000 and the total loss was worth $76 million for the same timeframe.
The former type of cargo theft continues. This is where thieves swipe loaded trailers while the driver is away. However, the FreightWaves story confirms a growing number of cargo theft tactics using stolen identities in a double-brokering scam with technology. Using this tactic, criminals can steal an entire trailer in just 60 seconds.
Emptying the trailer is riskier because it can take about 12 minutes. Sophisticated crime networks have the means to commit these cargo thefts as they’re responsible for nine out of 10 cargo thefts according to FreightWaves.
“With straight cargo theft, which is the method where you go straight out to the freight and you steal it where it sits, maybe in parking lots, drop lots, a cargo thief, for those types of thefts, has to be on-site, which puts them at higher risk,” Scott Cornell, Travelers transportation lead and crime theft specialist, tells FreightWaves. “With this newer double-brokering scam, thieves are able to be anywhere and target freight anywhere. Now they don’t have to be on-site. They don’t have to put themselves at risk. They are arm’s length away most of the time.”
High-Tech Cargo Theft Tactic
How does high-tech cargo theft work? How are the suspects able to do this remotely? Typically, the people committing these crimes are part of a large crime network. Some operate on an international level. They target companies with largely digital supply chains. The technology allows companies to move shipments quickly and efficiently.
It’s a Catch-22 situation. The same technology that facilitates supply chain activities is what the criminals exploit. Organized crime hacks into the transportation management systems and obtains access to sensitive information. This gives criminals enough information to impersonate a shipper.
Crooks intercept and reroute shipments to a destination of their choice where they gain control of the cargo. Then, it’s easy for them to sell the goods in an online store to unsuspecting customers.
Double Brokering Cargo Theft Tactic
While not dependent on as much technology as the high-tech cargo theft method, it’s important to understand how double brokering works. Knowing the process will go a long way in creating an effective well-rounded security solution that can deter various cargo theft tactics and other crimes.
Fictitious pickups involve a fraudster posing as an employee of a reputable freight company. The fraudster engages the brokers to settle on a price for the shipment. Once the shipment is picked up, the brokers never hear from them again and the cargo is long gone.
It can take several days before the broker realizes the shipment did not reach its original destination. In attempting to contact the fake trucking company, they learned they were victims of fraud. Such strategic theft frequently incorporates identity theft and sophisticated double brokering scams.
Another tactic is fraudsters impersonating well-known carriers. This approach typically occurs just prior to the weekend. Timing is key because it gives crooks a head start as it will take victims a few days before they figure out they’ve been scammed. The more time passes, the slimmer the chances of retrieving the stolen goods.
This approach has an element of risk. These criminals contact the brokers, impersonating a representative from a trusted carrier, hoping the broker regularly uses this carrier. Success depends on this. If it turns out the broker works with the carrier, the criminals often secure multiple loads.
In some instances, felons pose as real truckers by using phishing and other deceptive strategies to gather information on registered truckers. This effort demands considerable time and resources. Unfortunately, international crime rings have the resources to pull it off.
With access to the trucker’s identity, they can employ complex double or triple brokering frauds. They can also manipulate CDL records to appear as legitimate carriers. In doing so, they get away with cargo theft.
Another strategy is pretending to be a freight forwarder, which is a middleman at a freight exchange site between two legitimate parties. When a trucker collects the shipment, the fraudster provides a false delivery address where their team stands by to hijack the shipment.
5 Ways to Fight Cargo Theft
These tactics reinforce the need for shippers and manufacturing facilities to take a layered approach to security. How can companies create a more secure supply chain to deter cargo theft? Here are five ways to achieve this.
1. Follow processes and procedures
Too often, companies create processes and procedures only to become lax about following them. The processes and procedures must be robust and followed to the letter. As criminal tactics evolve with the times, so must the processes and procedures. Continuous process improvement needs to be a priority.
An aspect of the process to include is vetting all carriers and brokers. Ask the trucker for verifiable identification and contact the phone number listed on the load’s bill of lading while the trucker is present. Also, require background checks on all new employees and drivers.
Another important step is to confirm the bids on the shipment with the motor carrier based on the contact information on the record with the Federal Motor Carrier Safety Administration (FMCSA). Verify the trucker and carrier match the information on the shipment. If the delivery address is different from what’s on the bill of lading, then it’s a red flag.
Criminals try to take advantage of the rush and deadlines on Fridays in hopes someone will make a mistake. Remind employees and truckers to stay diligent and more so on Fridays.
The motor carrier should provide information to the company at least 24 hours before pick-up. This information includes the name of the driver and the carrier, the truck number, and insurance information. It would be worth investing in an asset-tracking system to track shipments. Some systems can maintain a list of approved truck drivers.
The process document will list best practices and red flags. For instance, a good practice is to avoid having a loaded trailer sit overnight. A better practice is to load the trailer right before departure. Hold off on releasing the load to the trucker until you’ve captured a photo of the driver, truck, and bill of lading. It also helps to capture the driver’s fingerprints.
Processes cannot work if no one follows them. Deterring cargo theft and other crimes requires training employees, truckers, and people on the front lines. Consider adding self-audits and random spot checks to the processes.
And finally, organized criminal networks will often follow a trailer until the trucker stops somewhere for a break. Require drivers to prepare themselves to travel at least 200 miles before stopping because crime rings will follow trucks for 150 miles.
2. Improve supply chain management
One of the key problems is the lack of real-time insights into the supply chain. Companies do not monitor the position and status of cargo loads. They need to be able to find a load at any time. Adding this capability allows them to respond to unexpected threats quickly.
Using asset-tracking technology can help close this gap. Companies should be able to know where their loads, trucks, and trailers are at any given time. If a tractor or trailer strays from its designated route, then the system quickly alerts the stakeholders who can contact the driver.
Due to the gap in supply chain visibility, companies open the door for thieves to exploit these weaknesses in the supply chain. Additionally, tracking the load makes it possible to alert the driver when they’re in a high-risk area. For more expensive loads, it may be worth adding a pace car to follow the truck.
3. Train employees and drivers, especially those at the front lines
Everyone involved with cargo activities needs to receive training. The training covers the red flags to watch for and the correct process for all parts of the load management and complying with the vetting process. Everyone needs to undergo refresher training as this is an expensive problem if people get careless with the process.
Truckers will get tips on how to minimize the risk of theft as well as security risks related to the handling of hazardous materials. The most successful companies prioritize education. Educate drivers to avoid high-risk areas. When they make a stop, advise them to back up to something like a wall or light pole to make it harder to open the door.
4. Use secure locks
There are some lock options that add barriers for criminals attempting to break in. One company uses Abus locks. They’re thicker and require a diamond bit to remove. Another company prefers locks on the right-side door. However, the shipper’s security seal can get in the way. To overcome this, the company uses newer trailers with enforcer boxes that cover the security seal and latch.
One fleet specs the trailer with welded rings on each side of a flanged connection. They also use welded rings at each valve opening. This allows the drivers to secure the cable lock or seal. Another tip to consider is to put matching numbers on the tags and freight bills.
5. Use video surveillance with remote monitoring services
A powerful security layer is the use of video surveillance with remote monitoring done by humans and artificial intelligence. It can record everything the cameras see. If a problem occurs, then you have the video footage to identify what happened and close the breach.
The most effective security combines both technology and human involvement. AI scans all the cameras to find a match to its thousands of programmed scenarios. As soon as there’s a match, it can notify the human monitoring operators who work in locations away from the business. They know how to respond to different scenarios. Because they are watching cameras in real time, they can act quickly by activating warnings on a speaker and calling local authorities.
Criminal networks have the technology, people, and resources to evolve their tactics for cargo. Distribution, logistics, and transportation companies can reduce their cargo theft risk by applying these five steps to add layers of security.
For a security system that reduces cargo theft risk and maximizes ROI, contact us.
