Increased Cargo Thefts Pressure Trucking Industry

Batten down the hatches and hold on to your cargo tight. The increase in cargo thefts that spiked during 2023 shows no signs of reversing in 2024. During Q1 of 2024, CargoNet documented a staggering 925 incidents of cargo theft, marking a 46% increase over the same period in 2023.

Reported thefts increased in most states, according to CargoNet’s first quarter supply chain risk trends analysis. However, California experienced the most significant spike, with a 72% year-over-year increase.

California isn’t the only state where truck drivers watch their freight like hawks and limit the amount of time they spend at truck stops known as hot spots for cargo theft. Texas has become a regional hotbed for cargo theft, with a 22% increase in reported thefts this year. California, Texas, and Illinois are the top 3 targeted states according to CargoNet’s recent report.

J.B., a truck driver who frequently travels through south Dallas, said his trailer was broken into at the Transport America truck stop in the area recently. The rest stop had security and was fenced in, so he thought it would be safe.

Thieves got away with half a pallet of off-brand snack cakes, J.B. said. But that wasn’t the most frustrating part of his experience.

“Everyone at T.A. just dismissed it like it happens all the time,” he said. “I waited for the police for 5 hours to make a report and they never showed.

J.B. tried to file an online report but had difficulty with the website. He was afraid to submit what he had without getting further assistance after reading a warning that said giving improper details was a felony. “So, I talked to someone over the phone, and he said I’d get a call from a detective and a report emailed to me. Neither of those things happened.”

A quick visit to the T.A. truck stop’s website where J.B.’s incident occurred reveals thefts there aren’t uncommon. The review section is filled with stories from other truckers with similar experiences.

Cargo Heists Grow More Sophisticated

Strong-arm robbery, truck-jacking, and breaking into parked trailers while truck drivers are sleeping aren’t the only ways thieves get their hands on freight.

Cargo theft has become more sophisticated these days. One of the biggest risks is carrier credentials getting stolen via a computer hack or social engineering. The term social engineering refers to a scheme that takes over carrier administrator accounts or online accounts for third-party transportation (3PL) services to trick shippers, brokers, and carriers into transferring loads to thieves instead of legitimate destinations.

Common social engineering techniques include impersonating employees. Cargo thieves obtain the credentials of legitimate company employees (usually through phishing techniques) and then use them to gain access to a company’s network.

Once criminals gain access to a carrier’s account, they can update the contact details with a phone number and email address they control. Unsuspecting carriers book a load and deliver to an address provided by the thieves, where the freight is loaded onto another truck and never seen again.

Finding new ways to steal physical cargo isn’t the only way thieves have evolved. They can use similar methods of double brokering to steal money. Here’s how it works.

1. Scammers set up fake companies: Scammers create fake carriers and brokerages. It costs them a few thousand dollars for a license and insurance, and a $75,000 average bond or security deposit for the fake brokerage. They can easily triple the earnings on their initial investment by running the scam successfully for several months.
2. Fake carriers engage in double brokering: The fake carrier gets a legitimate load from a real broker. Then, as the fake broker, they repost the load and offer it to an unsuspecting carrier at a higher rate than usual to attract them.
3. Unsuspecting carriers pick up and deliver cargo: An unsuspecting carrier picks up and delivers the load. The fake broker, posing as the fake carrier, receives payment from the original broker.
4. Fake brokers receive payment: The fake broker keeps all the payment for the load and never pays the unsuspecting carrier. This process can net them $10,000 a day if they set up 5 loads or roughly $200,000 per month.

The cycle repeats for 3 to 4 months before the thieves must set up a new fake company to continue their scam or risk getting caught.

CargoNet’s most recent data on this kind of shipping misdirection from Q2 of 2023 revealed a 700% increase in this method of cargo theft in the U.S. and Canada.

Trucks Aren’t the Only Cargo Theft Targets

Trucks and parking lots aren’t the only locations where truck drivers must be extra diligent in protecting their freight from thieves.

The top-targeted location types for cargo thieves are warehouses and distribution centers. According to CargoNet, small appliances, liquor, energy drinks, and copper were among the items heavily targeted.

Most of the cases of cargo theft from warehouses fall into the shipping misdirection category, with entire truckloads picked up and never delivered or transported with digitally altered paperwork to hide the theft.

Protecting Against Cargo Theft Requires Diligence

Protecting your cargo from these complex fraud schemes may seem impossible, but diligence is the key to keeping scammers from driving off with your products. Travelers Insurance, which provides commercial transportation insurance for manufacturers and wholesalers/distributors, recommends the two strategies to avoid becoming a victim of this type of cargo theft.

First, research company information through the Federal Motor Carrier Safety Administration (FMSCA). The FMSCA’s unified registration system serves as a clearinghouse for all entities regulated by the agency, including motor carriers, freight forwarders, and brokers. You can also check whether carriers and brokers belong to any industry associations that can validate their authenticity.

Second, work closely with shippers to confirm the identification of drivers at pick-up points. Ask for driver information, identifying details on the truck and trailer used for transport, and the use of secure pick-up numbers.

You also may want to limit access to digital accounts if you use digital tools to manage your supply chain. Most transportation management systems (TMS) allow you to add multiple users with unique login credentials. Doing so can allow you to cut off access to one person’s account rather than the entire system if you discover a hack.

Lastly, work with warehousing and fulfillment companies that share your commitment to improving security.