The Rise of Strategic Cargo Theft and Steps to Prevent It

By Jared Fritts

Cargo theft reached an all-time high last year — up 57% across North America alone.[1]

Most commonly, these thefts are the result of an ongoing misdirection of attacks on shipments, called strategic cargo theft, where perpetrators use stolen identities from motor carriers and logistics brokers to redirect and steal freight. This form of theft grew across the country but especially in domestic hotspots including California, Georgia, Illinois, Tennessee and Texas, and experienced a massive increase of 430% year over year.

From traditional methods to sophisticated high-tech schemes, strategic cargo theft often targets entire truckloads of goods carrying food, beverages and electronics. Fleet owners and operators should take proactive measures to safeguard cargo before a loss and know the necessary steps to follow if it does happen.

Top tactics for modern cargo theft

Diligence is required to safeguard cargo from sophisticated heists, which can manifest in different ways, from phishing and online scams to full-blown identity theft. Understanding common cargo theft tactics will help drivers and fleet carriers develop the right risk management strategies to reduce the likelihood of loss.

When impersonating a broker or carrier, perpetrators will mimic a freight broker to secure a shipment with a customer and carrier, and then arrange for a driver to transport and deliver the freight. They often use industry-specific terms, provide instructions not to disclose delivery details to the shipper and sometimes tender cash upon delivery.

Once the legitimate carrier has loaded the freight, they attempt to redirect the carrier to a warehouse for quick transloading and product movement. When the shipment doesn’t arrive, the customer investigates and realizes they might have engaged with a fraudulent broker or carrier. The unsuspecting driver who followed instructions and wasn’t aware of the scam often gets penalized.

Some scammers will “create” a new brokerage to secure the load contract, hire a third party to transport the shipment, receive payment from the customer and then vanish without paying the carrier.

Other common forms of strategic cargo theft include double brokering and impersonating a consignee. With double brokering, a broker enters into an agreement with a legitimate carrier to transport freight, but instead of fulfilling the job, the carrier brokers the load to another party without the consent of the original shipper and keeps the payment without compensating the actual transporting carrier. When impersonating a consignee, scammers use phishing and other methods of cyber breach to alter the recipient address and intercept an existing load.

Effective strategies for Strategic cargo theft prevention

Shielding your digital data from malicious actors is imperative to help prevent cargo theft. Here are four best practices to consider:

Safeguard and verify your information.
Leveraging your own experiences and insights from colleagues and professional networks can be a powerful proactive measure against cargo scams. For instance, if an unfamiliar person claiming to be from one of your vendors contacts you, cross-check with a trusted contact from that vendor to confirm the legitimacy of the new individual.

Observing nuances such as email addresses, phone numbers, physical addresses, logos and even names can thwart potential scams. Despite appearing minor, these discrepancies can result in significant property losses and damages.

As a shipper or receiver, meticulous tracking of every incoming and outgoing truck from your premises is vital. Note details such as motor carrier number, driver’s license information, bill of lading, carrier name and more, and utilize video cameras or capture photos to document this information whenever possible.

Although this level of scrutiny requires effort, it significantly raises the bar for bad actors attempting to steal your valuable cargo.
Screen new partnerships.
Like our personal relationships, maintaining connections with trusted carriers or brokers is key to ongoing security. The trust and understanding built over time ensure that your interests are prioritized. When considering new partnerships, vet potential providers thoroughly via references, your professional network and data resources like the Federal Motor Carrier Safety Administration or Carrier411 to safeguard your operations.
Maintain a healthy level of skepticism.
When evaluating carriers or brokers, beware of offers that seem too good to be true. Although some level of price differentiation exists in every industry, the core expenses in the trucking sector remain relatively stable: fuel, vehicle upkeep and driver compensation. If a provider promises significantly lower rates than competitors or unusually generous pay for drivers, delve deeper to understand the reason behind such offers.
Ensure information security protocols are in place.
Although seemingly fundamental, the following practices remain essential for protection against modern scams, including cargo theft:

Maintain password confidentiality. Only share key passwords with trusted, necessary parties and regularly update old passwords and close online accounts or systems that are no longer needed.
Avoid clicking on links from unfamiliar sources. Encourage employees to hover over hyperlinks with their cursor and check the browser status bar before clicking on a link.
Refrain from responding to unsolicited emails, especially ones that may be trying to impersonate a legitimate company.

Should a theft occur, promptly file a report with law enforcement, notify all relevant stakeholders and collaborate with your broker or insurer to initiate the claims process. By following these protocols, you can effectively address and mitigate the impacts of cargo theft.

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[1] Verisk “2023 Third Quarter Supply Chain Risk Trends Analysis.”