From pharmaceuticals to nuts, cargo thieves continue to target high-value shipments—a $15 billion to $30 billion a year problem, according to the Federal Bureau of Investigation, and that total is on the rise. And the coming months—from Labor Day through December—are historically the peak season for both freight and theft.
So what’s an owner-operator or small fleet to do, when going up against organized criminals using sophisticated—and successful—techniques to rob them of the loads and, potentially, of their livelihoods or even their lives?
It starts with understanding the problem: the who, what, when, and where.
By leveraging a nationally coordinated data-sharing system, CargoNet is designed to help the various elements of the supply chain, insurers, and law enforcement to do just that. The business is part of Verisk Analytics, a multibillion-dollar organization that focuses on risk management.
“First and foremost, our goal is to help reduce cargo theft and increase recovery rates,” says Sal Marino, vice president of business development. “It’s predicated on collaboration and information sharing. To be prepared as a driver or a carrier, you have to understand your risk. If you’re traveling through Salt Lake City, for example, your risk is much less than if you’re traveling through Dallas. You can’t just decide you’re not going to travel through Texas, but you can know the areas not to stop.”
Specifically, according to the latest data, in the second quarter of this year, CargoNet’s Command Center logged 297 reports of cargo theft, identity theft, vehicle theft, and other criminal intelligence matters relating to the U.S. and Canadian supply chain. While the number of theft incidents was down 15% compared with the second quarter of 2015, CargoNet recorded a $1.3 million increase in the total value of reported cargo thefts, rising to an estimated $39 million.
The average incident was valued at $330,339, up $63,243 from the year before. In the second quarter alone, CargoNet recorded eight cargo theft incidents worth $1 million or more, with one incident valued at an estimated $8 million.
Warehouse or distribution centers were the most common locations targeted by criminals, with 53 thefts. Unsecured yards were the next most common location, with 29. Thefts in this category grew 45% year over year. Fifty-nine percent of unsecured yard thefts occurred in Texas (35%) and California (24%). In contrast, cargo thefts were down 26% at truck stops and down 36% at parking lots.
What are thieves after? In the second quarter, $14.6 million in electronic items were stolen—the most costly commodity, but not the most frequently stolen. Food and beverage items were stolen most often, though losses in the category decreased 17% to $3.8 million.
Methods to the madness
The numbers and trends make sense to the professionals who track them.
“Why target food and beverage? Because there are no serial numbers on pistachios, for example. There is no RFID tag attached to them or hidden in their packaging,” says Scott Cornell, transportation business leader and crime/theft specialist for Travelers Insurance. “There’s no tracking of almonds over the Internet. Also, the ‘evidence’ gets consumed and fairly quickly at that. You can find TVs and computers; they last for a long time.”
The regional shift in the data stems from a concentration of opportunity.
“Holistically, Dallas has become a huge distribution hub for Texas; there’s a lot of short haul freight being pooled in that area now. It has become a big ‘pick and hold’ area for freight shipments,” says Chris McLoughlin, risk manager at third-party logistics firm C.H. Robinson.
Cargo thieves are displaying a far greater level of sophistication. In the past, McLoughlin notes that many thieves would focus on truck stops. Today, they focus on shipper facilities, surveilling their establishments, tracking truck arrival/departure times, and route patterns.
“It used to be that once you were 200 mi. down the road, you’d be past them,” McLoughlin says. “Now they will use multiple teams of drivers to follow trucks farther.”
Cornell adds that other tactics include the wider use of “fictitious pickups” with counterfeit documents and double-blind brokering schemes that shift stolen loads to innocent trucking firms to cover up the tracks of a theft.
In keeping with the collaborative nature of the organization, CargoNet has recently teamed with Truckstop.com to extend the reach of the network.
Sonny Smith is director of Assurance Services for Truckstop.com. His duties include leading cybersecurity initiatives for the freight-matching marketplace and its various units. And “well-defined security protocols” have long been embedded into the company’s technology, he explains.
Beginning with internal training and procedures to weed out “crooks” who posed risks to the legitimate users of the load board, Truckstop.com has over the years developed a system of alerts for stolen equipment and freight. The partnership with CargoNet is the latest advancement. Of particular focus is the “uptick” in identity theft that plagues shippers, brokers, and carriers.
“Identity theft is a really good example of something we’re seeing every day,” Smith says. “We work really hard to understand how these scams work. They’re forever changing and becoming more and more complex. The good old days of doing business on a handshake are long gone.”
The Federal Motor Carrier Safety Administration’s database contains basic information on carriers and brokers, and the Internet can be a good resource. And Truckstop.com offers reports on broker creditworthiness and carrier performance that provide members another “layer of security.”
“When you hear of identity theft and of a broker or a shipper being scammed, it’s not the carrier—it’s a criminal,” Marino adds.
“The carrier is a victim, too. When that happens, the carrier needs a soapbox to make sure no one else becomes a victim under their brand.”
For example, a carrier can alert brokers to details such as the phone number, name, or email address associated with fraudulent transactions—and make sure customers only use the carrier’s legitimate contact information.
But the Internet is not always your friend. Marino advises carriers to be careful about posting company information that can be used to create official-looking forms and documents. This includes items like insurance certificates or easily reproducible logos and letterhead. He also advises against listing customers’ names—an obvious target for identity thieves looking for an easy load.
Along with the basics—such as the need for drivers to be careful in selecting parking spots and to be aware of surroundings, especially when hauling high-value loads—see the box on this page for other tips from CargoNet.
Doug Morris, a retired Maryland state trooper and now director of safety and security operations for the Owner-Operator Independent Drivers Assn. (OOIDA), offers a similar list of precautions—along with anecdotes.
As to the need to keep quiet about what’s in the box, he explains that a driver can never know who’s listening.
“We had an incident in Maryland of a woman who worked at a truck stop diner, and she would give information to a boyfriend who was involved in cargo theft,” Morris says. “She would ask the driver what he was hauling. If it was something good, they would target the truck.”
Simply, truckers need to pay close attention to anything “that doesn’t look right,” whether that’s a car that’s been following for a while, or someone eyeing the rig in a parking lot.
“If you’ve got a gut feeling, call 911, tell them why you’re concerned, and give them the information,” he says. “Most drivers know when something doesn’t feel right. There should be no embarrassment whatsoever.”
Beyond cargo, those with nice, desirable trucks should be cautious as well. “An owner-operator can’t afford to lose a truck,” Morris says.
But if an owner-op falls victim to truck theft, OOIDA’s TRACER program (www.tracersystem.us) has proved effective in recovery efforts.
“We’ve had a 34% recovery rate on trucks that are posted, which is unheard of in the industry. Usually, after 48 hours, the recovery rate goes down to single digits, 4-6%,” Morris says. “If it’s an owner-operator that’s not a member, we’ll still help them out.”
He recounts a recent incident in Georgia in which cargo thieves used jamming devices to overcome GPS tracking technology—again, pointing to the sophistication of the “professional outfits.”
“A well-trained driver is much better than any electronics,” he says.