This post is part of a series sponsored by IAT Insurance Group.
Cargo theft last year hit a record high, increasing by 57% in North America alone.(1)
Most commonly, these thefts are the result of a continuation of a wave of cargo misdirection attacks known as strategic cargo theft, in which perpetrators use stolen identities from motor carriers and logistics brokers to reroute and steal cargo. This form of theft has been on the rise nationwide, but especially in the nation’s hot spots, including California, Georgia, Illinois, Tennessee and Texas., This represents a massive increase of 430% over the previous year.
Ranging from traditional methods to sophisticated high-tech schemes, strategic cargo theft often targets entire trucks loaded with food, beverages and electronics. Vehicle owners and operators are Take proactive steps to protect your cargo in front Anticipate losses and know the steps you need to take if a loss occurs.
The main methods of modern cargo theft
Protecting cargo from sophisticated theft, which can take many forms from phishing and online scams to full-blown identity theft, requires careful attention. Understanding common cargo theft methods can help drivers and fleet carriers develop appropriate risk management strategies to reduce the potential for loss.
Impersonating a broker or carrier; Perpetrators pose as freight brokers to secure shipments between customers and carriers, then arrange for drivers to transport and deliver the cargo. They often use industry-specific terms, instruct shippers not to disclose delivery details, and sometimes offer cash payment upon delivery.
Once a legitimate carrier has loaded the cargo, they attempt to direct the carrier to a warehouse to expedite the transfer and move the product. When the shipment never arrives, the customer investigates and realizes they may have done business with a fraudulent broker or carrier. Unsuspecting drivers who followed instructions and failed to notice the scam are often penalized.
Some scammers “set up” new intermediaries to secure contracts for shipments, hire third parties to transport the shipments, receive payment from the customer, and then disappear without paying the carrier.
Other common forms of strategic cargo theft include: Double brokerage and Impersonating the recipientDouble brokering is when a broker enters into a contract with a legitimate carrier to transport a shipment, but the carrier then brokers the shipment to another party without the original shipper’s consent and receives payment without compensating the actual carrier. When impersonating a consignee, fraudsters use phishing and other cyber-intrusion methods to change the recipient’s address and divert existing shipments.
Effective strategies for preventing strategic cargo theft
Protecting your digital data from bad actors is essential to preventing cargo theft. Here are four best practices to consider:
- Protect and verify information.
Leveraging insights from your own experience, colleagues, and professional networks is a powerful defense against cargo fraud. For example, if you are contacted by an unknown person claiming to be from one of your vendors, check with a trusted contact at that vendor to verify the legitimacy of this new person.
Potential fraud can be thwarted by observing subtle differences in email addresses, phone numbers, addresses, logos, names, etc. Though they may seem minor, these discrepancies can lead to significant property loss or damage.
As a shipper or receiver, it is essential to closely track all trucks that enter or leave your premises. Record details such as carrier numbers, driver’s license information, bill of lading, carrier name, etc., and whenever possible use a video camera or take photographs to document this information.
This level of scrutiny requires effort, but it significantly raises the bar for bad actors looking to steal valuable cargo.
- Screening for new partnerships.
Like any personal relationship, maintaining relationships with trusted carriers and brokers is key to your ongoing security. The trust and understanding built over time ensures that your interests are put first. When considering a new partnership, protect your operation by thoroughly vetting potential providers through references, your network of experts and data resources like the Federal Motor Carrier Safety Administration and Carrier411.
- Maintain a healthy level of skepticism.
When evaluating carriers and brokers, be wary of offers that seem too good to be true. While some price variation exists in every industry, the major expenses in the trucking sector remain relatively stable: fuel, vehicle maintenance, and driver compensation. If a provider promises rates significantly lower than competitors or unusually high compensation for drivers, dig deep to understand the reasons behind the offer.
- Ensure information security protocols are in place.
Although these may seem basic at first glance, the following measures remain essential to protect yourself against modern fraud, including cargo theft:
- Keep your passwords confidential. Share sensitive passwords only with those you trust and who need to know, regularly update old passwords, and close online accounts and systems that you no longer need.
- Avoid clicking links from unfamiliar sources and encourage employees to hover over hyperlinks and check their browser’s status bar. in front Click the link.
- Do not respond to unsolicited emails, especially those that may be pretending to be from a legitimate company.
If theft does occur, immediately file a report with law enforcement, notify all relevant parties, and work with your broker or insurance company to begin the claims process. Following these protocols will help you effectively combat and mitigate the effects of cargo theft.
Contact Loss Control
Have questions about how to mitigate your risks? Email us Email: losscontroldirect@iatinsurance.com Here’s your chance to see your question answered in an upcoming blog.
(1) Velisk:Supply Chain Risk Trend Analysis for the Third Quarter of 2023.”
