Cargo theft numbers continue to rise partly thanks to the increasing price of goods and inflation. Thieves have found cargo theft to be a profitable crime as they can swipe large amounts of items and sell them on the resale market.
According to a CNBC report, food and beverage coming into a port or in a warehouse appear on the top of the list of products targeted by thieves. The story references CargoNet’s cargo theft report in which January saw a 50% increase in food cargo theft.
The report goes on to say the average value of each food cargo theft is $214,000! Moreover, the FBI says cargo theft costs trucking companies and retailers somewhere between $15 billion to $30 billion a year.
It’s not just food and beverage commodities that are a problem. FreightWaves identifies the No. 1 commodity for cargo theft was household goods in 2022 followed by electronics.
In referencing the year 2022, CargoNet states there were more than 1,700 supply chain risk events in the U.S. and Canada. This is an increase of 15% over the previous year. The value of the losses associated with cargo theft was $223 million in this timeframe. Unfortunately, warehouses and distribution centers are on the short list of top targeted locations.
Fictitious Pickups Affect Warehouses and Distribution Centers
The most common form of cargo theft is physical theft. However, criminals have expanded their reach through cyber scams and identity theft using fictitious cargo pickups. These are also referred to as strategic theft. CargoNet confirms a 600% increase year-over-year in fictitious pickups. That’s because organized retail crime has the resources to pull it off.
The way fictitious pickups work is that during negotiations with the broker for the price of the load, they identify themselves as a representative from a freight company. The person with the fake identity picks up the load and moves on to the next victim.
Eventually, the broker will find out the cargo did not arrive at their destination. To determine what happened, they’ll contact the trucking company about the cargo load. The trucking company will verify they did not pick up the load. “This style of fictitious cargo pickup relies heavily on subcontracting the shipment to a legitimate motor carrier and having the shipment misdirected to another address,” writes CargoNet.
It’s not just the trailer that is being stolen. FleetOwner learned from Danny Ramon, Overhaul’s intelligence and response manager, that high-value pilferages have gone up. Instead of stealing the trailer, the criminals swipe the cargo from the trailer. This type of cargo theft used to only occur about 10% of the time. That number has gone up to more than 90%.
Here are recommendations from CargoNet and Ramon on how to reduce the chance of cargo theft through fictitious pickups, identity theft, and double brokering scams.
- Verify bids on shipments with the motor carrier using the contact information on file with the FMCSA.
- Verify the name of the motor carrier and driver matches those to whom the shipment was tendered.
- Be cautious when new customers offer to pay through a peer-to-peer money transfer app.
- Make the vetting process a high priority.
- Assess risk by checking the freight and the lane in which they will be hauling it against the data.
- Notice if a potential thief uses a day cab for a long haul.
- Look up carriers on FMCSA’s website when someone offers to take high-value loads.
- Request the phone number of drivers picking up high-value loads.
- Park the truck in well-lit locations.
- Use landing gear locks for trailers, kingpin locks for fifth wheels, and air cuff locks.
Scott Cornell tells FleetOwner that the key to knowing what criminals may steal is cargo they know they can sell. Thieves target items in demand based on the economy’s current status. For instance, more luxury items are stolen in a stronger economy. Whereas essentials like food and beverage are at a higher risk for theft in a weaker economy.
Ramon has come across situations where the driver did not match the photo in the CDL. There have been instances when the DOT number on a truck is printed on paper and attached to the side of the truck. The vetting process can help prevent these cargo thefts.
Organized Crime Rings Adapt to Market Trends
Organized crime gangs are responsible for nine out of 10 cargo thefts. As mentioned before, they have the people and resources to commit these sophisticated cargo thefts. The FreightWaves article quotes Scott Cornell who said these organized crime rings watch over warehouses and distribution centers as they make notes about trucks and shipments.
Organized crime rings have the ability to gather intel to identify what the warehouses and distribution centers carry. They also have the ability to adapt to changing market trends.
“These criminals can react, turn on a dime, react to market trends very quickly,” Ramon says. “Anything that has retail purchasing restrictions is going to be big. Anything that’s bearing a bigger brunt of inflation or product shortages, for whatever reason, whether that’s because of flooding in California or avian flu, anything causing things to go up and desirability to go up in price because there’s a shortage is definitely going to be targeted.”
Here’s how massive, organized crime rings can be. Overdrive reports on the California Highway Patrol’s Organized Retail Crime Task Force stopping a cargo theft ring that stole more than $150 million worth of merchandise. The arrest included 40 suspects and recovered 20 stolen trailers, $50 million worth of stolen merchandise, firearms, vehicles, and 13 gold bars.
This ring managed to take more than 200 cargo loads from multiple retailers. Among the long list of crimes, the ring is charged with grand theft of cargo, vehicle theft, and identity theft.
How to Enhance Warehouse and Distribution Center Security
It doesn’t matter where the warehouse or distribution center is located. All locations across the U.S. and Canada need proactive security to help deter fictitious pickup and prevent organized crime rings from coming after the warehouse or distribution center. Here are the four most effective ways to follow the earlier recommendations from experts to help deter cargo theft.
1. Do vetting by following processes and procedures
The experts said that simple vetting can stop a lot of crimes from happening. Recall Danny Ramon mentioned scenarios where the photo in the CDL didn’t match the truck driver. A simple walk around the truck and trailer could have spotted the printout of the DOT number posted on the truck.
Processes and procedures help ensure you don’t miss a step in the vetting process. It reminds you of what steps to take to cover the bases. The process needs to have steps to contact the motor carrier to verify bids on the shipment. Check the contact information on file with the Federal Motor Carrier Safety Administration (FMCSA). This helps with confirming the motor carrier and driver match the information on the shipment.
Keep a list of your customers and partners along with their contact information handy. They can help. Watch out for new customers who attempt to pay with a peer-to-peer money app. Make it a requirement for the motor carrier to share information at least 24 hours before pick-up. Ask them about the name of the driver and the carrier, the truck number, and insurance information.
2. Use smart locks and seals
Organized crime rings have 3D printers and tools to make copies of security devices. They can replicate an ISO 17712 high-security cargo seal and lock in minutes. They use the fake seal to replace the original seals. One way to fight this is to randomize the color of the seals.
You can add another layer of security by using air cuff locks, kingpin locks, and high-security rear-door locks. The latter locks the dashboard brake valves to prevent the unauthorized movement of the truck and trailer.
3. Implement an access control system
An easier way to manage the truck driver check-in and verification process is to use an access control system integrated with video surveillance and remote monitoring. An access control system adds another layer of security that lets you stay on top of the truck’s movement from arrival to departure. The system can manage building entry including those who have access to limited-access rooms.
4. Add video surveillance with remote monitoring
Unlike reactive traditional security solutions, remote video surveillance with monitoring takes a proactive approach to security. This is especially the case when the security cameras come with monitoring done by video analytics and human operators.
Video analytics scans all the cameras for thousands of scenarios. As soon as it finds a potential problem, it alerts the monitoring operator — located away from the warehouse and distribution center — who can respond appropriately to the situation. The monitoring operator might use an onsite speaker to warn the intruders they are being watched, contact the police, or both. This is how remote video surveillance can help deter crime as well as identify gaps in security.
Organized crime rings are efficient and sometimes get away before the police arrive. All video recordings can be saved for search and retrieval as needed.
Video surveillance with monitoring can yield a return on investment within months. At the same time, it can help lower the risk of cargo theft. To learn more about deterring cargo theft with video cameras and remote monitoring, check out Remote Video Surveillance: More Than Just Catching Criminals. For a customized security plan that maximizes your ROI, contact us.
