Freight Theft Is Real. How Can You Protect Yourself?

Statistics and Targeted Groups

In a $67.5 billion industry, it is warranted that theft would be present within the operation. Where there is money, there will always be thieves. According to a research study conducted by the Chubb Group of Insurance Companies, consumer electronics, food, and apparel are the most targeted commodities within the transportation industry. The study indicates that more than a third of these targeted thefts occur at highway rest areas and truck stops. To be exact, about 39% of all freight thefts occur under these settings with unsecured drop-offs accounting for about 27%.

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Statistics and targeted groups for freight theft

Freight theft has been around for centuries and comes to no surprise that it still poses as a theft, but as the industry and technology have evolved from horse-drawn carriages to mac superliners, so have the bandits to organized crime syndicates. Freight theft costs the global transportation industry billions of dollars annually and these numbers seem to be growing as the world continues to intertwine in intricate networks of globalized logistics.

"Cargo thieves are opportunists, and these statistics indicate where, when and how they are likely to strike and the type of goods they are likely to target."
- Barry Tarnef, Marine Loss Control Specialist for Chubb Marine Underwriters


Growing Theft & Falling Reports

Looking at the Canadian transportation industry, the Insurance Bureau of Canada has reported $35 million in cargo theft in 2019 compared to a $2.1 million report in 2014. The world GDP within this time frame has been growing at an average of 3.5% annually, yet we have a staggering spike in freight theft at 1566.667%. These disproportionate statistics could be attributed to a lack of reporting to the Bureau and putting a number on the percentage of thefts that go unreported could help harmonize these statistics for a clearer view of the industry. However, this does not negate the fact that freight theft has been increasing in staggering numbers. This phenomenon is not beyond our developed economies as the Canadian Trucking Alliance has reported that freight theft costs the Canadian economy $5 billion alone.

Preventative Measures

So now that we have established that freight and cargo theft is an undeniable issue, the practical way to proceed would be to highlight the processes and necessary steps needed to combat freight theft. According to Barney Tarnef, a marine loss specialist for Chubb Marine Underwriters, inside information is the leading factor resulting in successful freight thefts. Tarnef highlights seven preventative measures that could deter the possibility of freight theft.

Thoroughly screen prospective employees. Some cargo security experts maintain that a high percentage of cargo thefts involve inside information or complicity.

Direct Cargo Theft

Direct cargo theft most commonly occurs in areas where the load is left idle. These areas include, but are not limited to parking lots, truck stops, roadside parking, drop lots, yards, and any form of the area where the load could be left unattended. Thieves look for indicators on trucks that would usually help identify loads that they could turn quickly for a profit. Some of these indicators are thermostats which could point towards pharmaceuticals and groceries.

The most optimal methods to combat and prevent susceptibility would be to enact and enforce a no unattended trailer policy, ensuring maintenance is frequently conducted on rear truck doors, utilizing air cuff locks, and installing landing gear locks.


Strategic Cargo Theft

Strategic cargo theft involves much higher and well-planned deception. Thieves have evolved by developing unconventional methods that trick shippers and carriers to deliver loads to the thieves themselves. Some of the most common deceptions involve identity theft where thieves generate fake loads in order to invite bidding companies to send them their information. Along with false pick-ups and double brokering scams,  thieves strategically plan these events to be brokered during the end of the week in order to subjugate the drivers to the stress of deadlines and constraints, which may entice a mistake that they will capitalize on.

Companies need to invite checks and balances within their processes in order to encourage and enforce stricter and more thorough research and verification through the FMSCA. Companies may also source the verification to third party vetting solutions to ensure that the information and load request is legitimate.

Technology & Cyber Theft

As we advance and make drastic improvements in technology we unconsciously become more susceptible to unwarranted threats. The unfortunate truth is that the improvements in technology also equip thieves with tools to aid their heists. Thieves utilize sniffers which are pieces of equipment that scans for trainers that include some form of GPS tracker, then they put in place a jammer that covers a certain radiance depending on its caliber which conceals the location of the load which is usually an aid to law enforcement when searching for the load.

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Cyber theft is a real issue for freight too


Thieves may also commit themselves to phishing scams that invite company users to install a form of Trojan malware. This virus potentially can provide thieves to sensitive data remotely such as the bill of lading, pick-up authorization, and other regulatory paperwork. This allows them to technically forge the pick-up from the origin-destination with the legitimate paperwork.

It is essential that companies leverage the advancement in technology and cybersecurity to set in place competent processes, user permissions, and virus protection systems in order to protect sensitive data and documents that potentially could allow forgery.

Citations

7 Steps to Prevent Cargo Theft. (2012, May). IndustryWeek. https://www.industryweek.com/leadership/companies-executives/article/21956198/7-steps-to-prevent-cargo-theft

5 Cargo Theft Tactics and How to Help Prevent Them. (2020). Travelers.Com. https://www.travelers.com/resources/supply-chain-management/5-tactics-cargo-thieves-use

Cargo Theft. (2019). Insurance Bureau of Canada. http://www.ibc.ca/on/business/business-crime/cargo-theft

IBISWorld - Industry Market Research, Reports, and Statistics. (2020). Ibisworld.Com. https://www.ibisworld.com/industry-statistics/market-size/public-transportation-united-states/

Real GDP Growth. (2020, September). International Monetary Fund https://www.imf.org/external/datamapper/NGDP_RPCH@WEO/OEMDC/ADVEC/WEOWORLD

The Cargo Theft Threat - Inbound Logistics. (2010, January). Inboundlogistics.Com. https://www.inboundlogistics.com/cms/article/the-cargo-theft-threat/

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