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Cargo theft rates surge as criminals go high-tech

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cargo theft

Cargo thieves are changing tactics as supply chains have digitized, making it critical for companies to implement multiple security layers to prevent losses, experts say.

Strategic thefts, such as identity theft, double brokering – where a broker or carrier transfers a load to another trucking company without notifying the shipper – online scams and fictitious pickups, are a growing concern as in-demand, higher-value goods continue to be targeted, they say.

There’s been a shift from domestic to international cargo theft rings, with a focus on virtual and strategic methods, said Scott Cornell, Phoenix-based transportation lead and crime and theft specialist at Travelers Cos. Inc.

“They’re stealing the freight virtually. They’ve made it almost a work-from-home type of career choice. They can target freight wherever it is, from wherever they are. They don’t have to be physically on-site in Southern California or Miami, or in Memphis, or in Atlanta or Savannah,” Mr. Cornell said.

Cargo theft continues to be driven by demand for high-value goods, such as solar panels, energy drinks and virtual reality games, said Keith Lewis, vice president of operations for CargoNet, part of Verisk Analytics Inc. in Jersey City, New Jersey.

“Virtual reality headsets with video games tend to be upwards of $2 million per shipment. Years ago, we would all cringe when we'd say a million dollars per shipment, but that’s not the most expensive item we can put on a truck now,” Mr. Lewis said.

Smart phones and household appliances, like vacuum cleaners and refrigerators, remain common targets, he said.

The average stolen shipment value per event more than doubled to $281,757 in the first quarter of this year, up from $102,000 in the year-earlier period, as estimated cargo theft losses in the United States jumped to $76 million. The number of reported thefts jumped to 925 in the quarter, up 46% from the prior-year period, according to data from CargoNet. Second-quarter figures will be released in a few weeks.

Inflation accounts for some of the increase, said Jennifer Nuest, Indianapolis-based senior vice president and national transportation practice leader at Amwins Inc.

Higher-priced consumer goods, including food and beverages, are an easy target, Ms. Nuest said. “The benefit to them is the evidence has gone in days. There are no serial numbers to check the goods consumed,” she said.

Companies should vary security procedures and protocols, which should be built into the cultures of organizations, experts said.

Security processes should be tailored to the specific operations of a transportation or logistics business, and multiple deterrents should be deployed, said Rich Soja, New York-based global head of marine at Allianz Commercial, a unit of Allianz SE.

“Not everyone has the same degree of concern for what they ship. If you’re shipping electric components, food and beverage, building materials and apparel, this really needs to be high on your agenda,” he said.

Ongoing staff awareness training, reviews of hiring practices and carrying out tabletop exercises when something goes wrong are also important, Mr. Soja said.

Technology has been built into the supply chain to move shipments faster and more efficiently, and more vetting is critical, Mr. Lewis said.

“Most shipments are moved via load boards. There’s no face-to-face transaction. There’s no hand-to-hand. It’s all done through an online platform, and it’s so easy to steal someone’s identity or buy a company and use their identity to steal hundreds of loads,” he said.

A layered approach to cargo security begins with developing company internal processes and procedures, Mr. Cornell said. Part of the process is training frontline staff, he said.

“We spend a lot of time with our clients going out and training their call center staff — the people that are booking the loads — on red flags, what to look for and watch for when somebody might be trying to scam you into booking a load with them,” he said.

Using technology to vet cargo partners can help, Ms. Nuest said. “But you still need the human intervention, you need that human check,” she said.