Cargo theft has been on the rise within the U.S. for over five years. This issue has impacted countless businesses and is only accelerating throughout 2023. According to CargoNet, the National Insurance Crime Bureau’s leading database and of cargo-theft-related information (aggregated from a number of national sources), more than $44 million of freight was stolen in Q2, 2023 alone. This is a 57 percent increase over Q2, 2022.
The depth of this problem is truly staggering; more than 580 incidents were reported in Q2, with an average of $260,000 in cargo value lost per theft. As national agencies work alongside transportation companies and American businesses to combat these issues, in the end, we all play a part in their resolution.
Your company is central to this effort. Carriers are often the front line of defense against cargo theft, making it important to recognize and snuff out these schemes before they begin.
At the end of the day, though, you have a lot to think about — you need to find great loads, ensure your customers are happy, manage hours of service and turn a profit (among other things). As a result, it’s understandable if cargo theft isn’t on your radar. I mean, what are the odds you’ll get caught in one of these transactions?
As the rate of U.S. cargo theft continues to ramp up, your company is at risk. In fact, in many scenarios, the trucking company (the party that most recently touched the freight and executed its delivery) is held responsible for stolen items. The last thing your company needs is the expense and headache of cargo theft. Let’s make sure you avoid these traps.
Since 1955 Anderson Trucking Service (ATS), has been helping transportation providers, shippers and truck drivers navigate the complex transportation landscape. While stolen cargo hasn’t always been a pressing issue, we’ve become intimately acquainted with how these events occur, their warning signs and how to avoid them.
In this article, you’ll learn the following:
- How trucking companies become the victims of cargo theft
- 3 cargo theft red flags
- 3 tips for avoiding cargo theft schemes as a carrier
Let’s jump in.
How Trucking Companies Become the Victims of Cargo Theft
Cargo theft can take a number of forms. Sometimes, for example, portions of a load are stolen from a trailer while it's parked or stalled. This could be a handful of products or a single pallet. These occurrences are fairly random and would be categorized as crimes of “convenience or opportunity.”
Here, we’re talking about another form of cargo theft — “shipment misdirection” attacks where an entire load is stolen.
The process of stealing a truckload of freight takes planning and coordination. As you can imagine, these aren’t typically crimes of convenience. Instead, the perpetrating party needs to fully control the execution of a load from the start — finding an unknowing carrier, setting a destination, handling payment, etc.
Here’s how this might play out:
- Using fake or stolen information (MC/DOT numbers), thieves misrepresent themselves as a freight broker or carrier to a shipper, promising to haul their load at a competitive price.
- With the tender in hand, this party searches for a carrier to haul the shipment, representing themselves as a freight broker.
- To make this shipment more attractive, this party may post the load at a higher-than-market rate. This entices an unknowing carrier into accepting the shipment. They might even overlook weird information or missing details.
- The shipment is picked up at its origin and delivered to the incorrect destination (a location specified by the thieves, not where it was intended to end up).
- Following delivery, the cargo is transloaded onto another trailer or stolen in some other way.
- The party that stole the freight disappears from the marketplace and is impossible to contact following delivery.
While this is only one way a cargo misdirection scheme might occur, it’s a good representation of a common scenario happening in the trucking industry today.
Usually, the thieves disappear following delivery, leaving the carrier without payment and subject to questions when it never arrives at its destination. This is the last place you want to find yourself in, so let’s make sure you never do . . .
3 Cargo-Theft Red Flags to Watch For
Cargo theft schemes aren’t always easy to recognize at first glance. Seasoned thieves do an excellent job of disguising these attacks to avoid scrutiny, questions and hangups. That said, here are three common warning signs (or “red flags”) that a cargo theft attack might be imminent — or already happening:
- Inconsistent paperwork and contact information
- Last-minute plan changes
- Unusual payment terms
1. Inconsistent Paperwork and Contact Information
Bills of lading, load tenders and other documentation often provide warnings of impending cargo theft before it happens. You see, in a healthy transaction (between a shipper, transportation provider and consignee) information is consistent across all paperwork.
Things like company names, the origin location, the destination location, cargo details and the contact information for all parties shouldn’t vary from one document to another. Be wary if it does.
Another way this shows up is when the email address or phone number of the party you’re communicating with doesn’t match the company’s name/information or where they’re located.
For example, if you’re working with a broker “XYG Logistics” from St. Cloud, MN and are receiving emails from firstname.lastname@example.org instead of email@example.com or phone calls with a California area code, that’s a red flag. Everything should match up here.
2. Last-Minute Plan Changes
As a carrier, you’re well aware of a shipment’s destination before you agree to haul it. This helps you decide how much to charge, which route to take and what you’ll do when you get there. Each shipment’s destination information (as specified by the shipper) should also be present on multiple pieces of paperwork — including its bill of lading.
In cargo theft schemes, however, thieves need to get you to haul freight to a secondary location so they can steal it. Often, this is done by changing the delivery address after you’ve left the shipper. Be very cautious if this happens and don’t deliver cargo to a different location than what's specified on its bill of lading.
If you’re told “There’s been a change of plans, we need you to deliver it to ____ instead” you could likely be caught in a cargo theft scheme — particularly if you’re being directed to a warehouse or parking lot (this is where most cargo theft occurs).
3. Unusual Payment Terms
The easiest way to get freight moved in a timely manner and (in some cases) encourage a carrier to overlook certain details (like a last-minute plan change) is to offer a lot of money to haul it.
That’s why, if a shipment pops up on your radar offering a rate that far exceeds any comparable loads, this is a red flag. Shippers are very price-conscious and won’t pay way above market rates unless they’re in an emergency. As such, do your due diligence with unusually high rates. Often, if it feels too good to be true, it is.
3 Tips For Avoiding Cargo Theft Schemes as a Carrier
Now that you know the red flags signifying a freight theft attack may be in progress, here are three things you should keep in mind to avoid getting involved in cargo theft incidents going forward:
- Practice due diligence
- Be wary of “too good to be true” offers
- Lean into trusted partnerships
1. Practice Due Diligence
Be careful when working with unfamiliar parties — particularly freight brokers. Before you agree to haul a load, do a little bit of research on the company selling it. Look them up. Do they have a website? Does their DOT number match their company name? How long have they been in business? Can you find any reviews on working with them.
The more you can do to ensure every party involved in a transaction is legitimate, the better protected you’ll be. In fact, don’t be afraid to ask the hard questions when on the phone with your point of contact. If you ever feel uncomfortable, trust this instinct.
Analyzing all paperwork and rate confirmations for errors/misleading information is another part of doing your research. Always make sure information like contact details and shipment specifics are clear and consistent across the board.
2. Be Wary of “Too Good to Be True” Offers
We’ve said it before and we’ll say it again: if a rate seems too good to be true, it probably is.
You should absolutely second guess it when a company offers you far more money to haul a load than you could get for a similar one (with a comparable commodity, insurance requirement, length of haul, timeline, start/end point, etc.).
If you see these loads and you’re intrigued, do some research and ask questions before accepting them. This will help you avoid cargo theft scenarios where you might not be paid at all.
3. Lean Into Trusted Partnerships
In the transportation business, like many others, partnerships are important. In an environment where stolen freight happens every day, now is a good time to work with partners you know well.
Carriers often get caught in these attacks when working with unknown freight brokers or third parties. You’re far less likely to experience these issues if you’ve hauled freight for a company in the past; you know they’re legitimate, understand their processes and trust them to pay you fairly.
Going forward, find some good partners and work with them. That’s one of the safest ways to do business today.
Start a Great Partnership, Avoid Cargo Theft
Cargo theft attacks have been on the rise for a while now. In 2023, instances of stolen freight have really increased, making it difficult for carriers, like you, to know who to trust.
Shipment misdirection attacks, although difficult to spot initially, have some warning signs which include:
- Inconsistent paperwork and contact information
- Last-minute plan changes
- Unusual payment terms
These are red flags to watch out for. Additionally, to keep your company safe, be sure to practice due diligence, avoid offers that seem too good to be true and lean into trusted partnerships going forward.