By Jared Fritts

Today’s cargo thieves have masterminded a more hands-off method of pilfering loads — and they’re doing it digitally.

Consider the case of a high value-high theft risk load, such as laptop computers. To move the load for their customer, a broker posts this load as available on several load boards and tenders the load to a carrier that contacted them at an agreed-upon rate. Everything seemed fine – until the cargo never got delivered to its intended recipient.

A call to the trucking company revealed that it had no contact whatsoever with the broker and is unaware of ever being dispatched on this load. A cargo thief essentially stole the identity of the legitimate trucking company, was tendered this high-value load, and stole this load of laptops.

Brokerage cargo theft involves commandeering or misdirecting shipments of valuable goods. The crime can be further described as a blend of identity theft and cargo theft, which disrupts operations for participants across the entire supply chain. In most cases, organized crime rings develop sophisticated methods to steal property in transit or from parked trailers. Occurrences of cargo theft have been on the rise since hyperinflationary post-COVID price trends allow thieves to command higher prices for products with low supply and high demand.

Schemes like these increased by 600% in 2022 when compared to 2021[1], replacing the theft of parked or unattended loaded trailers as the number one cargo theft method plied by cargo thieves. Items most frequently and recently targeted in fictitious pickups include solar products and auto parts.[2]

5 ways to vet your fleet partners

If you’re using outside carriers to move your loads, taking steps to minimize fraudulent solicitations and pickups can save significant dollars and help prevent freight brokers from financial failure. Here are five tips freight brokers can use to vet the fleets you contract with.

1. Verify their information. When you have conversations with trucking companies, you must be certain the person on the other end of the phone is a legitimate representative. Use the Federal Motor Carrier Safety Administration (FMCSA) website [3] to verify phone numbers along with the physical addresses of the trucking company you’re engaging. The motor carrier should also possess the proper operating authority, and you can use the FMCSA website to ascertain if that authority is in good standing.

2. Check their safety record. A best practice when reviewing potential carriers is to check their Department of Transportation (DOT) safety rating and Compliance, Safety, and Accountability (CSA) Behavior Analysis & Safety Improvement Categories (BASIC) scores.[4] Safety ratings will fall under one of three categories: satisfactory, conditional, or unsatisfactory. You can also locate CSA BASIC scores, which reflect performance as compared to their peers in seven specific categories. You can investigate the company further by looking at its roadside DOT violation record. Plan these background checks and reviews of carriers you use at regular intervals. Carriers with solid safety track records may also be less likely to have their identity hijacked.

3. Review their certificates of insurance (COI) and their limits of liability. Before tendering loads to any carrier, ask the company for a COI to review some critical information. Primarily, be sure the effective dates of coverage on the COI are current and that the carrier’s insurance company meets rating standards. You’ll also want to review that the amount of cargo coverage in place meets the requirements of the load being brokered. Use a general checklist detailing insurance items to reduce the chance of fraud.

4. Build solid relationships with carriers. When you do repeat business with reliable and trusted trucking companies, you most likely recognize the voice and tendencies of the person or team on the other end of the line. If someone claims to be a new employee, you can ask questions about the company and its personnel. That process may deter rogue operators from pretending to be legitimate trucking companies. Despite the increased virtual nature of your business, relationships matter as much as ever.

5. Obtain a signed contract. Before tendering a load to a trucking company, obtain a signed copy of the broker/carrier agreement. A best practice is to send any potential carrier a qualification packet that lists all information and documentation that is needed, including company information and COI.

ASK A LOSS CONTROL REPRESENTATIVE

Have a question on how to mitigate risk? Email losscontroldirect@iatinsurance.com for a chance to see your question answered in a future blog.

[1] Verisk. “2022 Supply Chain Risk Trends Analysis,” Accessed July 19, 2023.

[2] Overdrive. “Cargo theft saw big rise in 2022 l Spot rates drop off late-year gains to start 2023”, January 12, 2023

[3] U.S. Department of Transportation Federal Motor Safety Carrier Administration, “Safety and Fitness Electronic Records.”

[4] U.S. Department of Transportation Federal Motor Safety Carrier Administration, “Safety and Fitness Electronic Records”