Cargo theft numbers are rising. In Quarter 2, 2023 alone, nearly $45 million in shipments were stolen (Verisk, 2023). That’s a 57% increase from 2022! Here’s why all industry members, particularly carriers, should be paying attention to cargo theft signs this season (and frankly, all seasons!).
What are the consequences of cargo theft for a carrier?
Cargo theft results in immediate financial losses for carriers who oftentimes fall responsible for the stolen freight. The stolen goods represent not only the value of the cargo itself but also the lost revenue from the failure to deliver. Carriers may also incur additional costs related to investigations, legal proceedings, and increased insurance premiums. Insurance providers may view the carrier as a higher-risk entity, and as a result, premiums may increase to compensate for the elevated risk of future thefts. Not to mention, cargo theft can quickly erode the trust built between a carrier and their customer which could cost the business relationship altogether.
How does cargo theft occur?
There are all sorts of creative ways for thieves to get their hands on freight, but there are some common trends that are popping up that we can discuss in more detail.
The current uptick in cargo theft may be attributed to a shipment misdirection method. Essentially, a thief may use a stolen or fake MC number to mislead a shipper as a freight broker or carrier. The thieves may promise competitive rates and the shipper will tender the load to the fake freight broker or carrier. The thieves will then source a real, unknowing carrier to pick up the load from the shipper and deliver it to an incorrect destination. The cargo is then in the hands of the thieves, and they quickly disappear. The carrier, being the last party to be in contact with the freight, is typically held responsible for the stolen goods and they are left without payment from the fake freight broker.
Hijacking or Robbery
Thieves may intercept shipments while they are in transit, using tactics such as blocking the road, forcing the driver to stop, and then stealing the cargo. This can occur on highways, rest areas, or other vulnerable locations.
Tampering with Seals
Thieves may tamper with seals on cargo containers during transit. By breaking or replacing seals, they gain unauthorized access to the cargo without leaving visible signs of a breach.
In the digital age, cargo theft can also occur through cyberattacks. Criminals may hack into systems to access shipment information, reroute shipments, or manipulate electronic documentation.
Smaller-scale theft, pilferage, involves stealing individual items or small quantities from a larger shipment. This can occur during transit or when cargo is temporarily stored.
What are the common signs of cargo theft?
As a carrier, here are a few things you can look out for to avoid being another cargo theft statistic:
Delivery Address Change
Receiving a change of delivery address after you have already departed the shipper is highly unusual. Do NOT deliver a load to a different address from what is listed on the Bill of Lading. This could be a tactic to deliver the load to a secondary location for theft.
Altered or Inconsistent Documentation
Changes or inconsistencies in shipping documentation, such as discrepancies in the bill of lading, could be indicative of cargo theft. Verify the authenticity of all paperwork and ensure the details are consistent between the shipper, carrier, and consignee. Pay close attention to the contact information, addresses, and cargo details listed on the rate confirmation and bill of lading.
Unusual Behavior at Rest Stops
Be vigilant for unusual behavior at rest stops or parking areas. Activities such as loitering, surveillance, or individuals showing undue interest in specific cargo may be signs of potential theft.
Tampering with Seals or Locks
Any signs of tampering with seals, locks, or the trailer itself may indicate that someone has attempted to gain unauthorized access to the cargo. Broken seals or locks should be thoroughly investigated.
Freight Brokers or shippers that offer “too good to be true” offers should signal a red flag to you. Any rates or payment terms that are extraordinary should be investigated and probably avoided.
As a carrier, you must do your due diligence to avoid cargo theft. Do your research (especially, on unfamiliar freight brokers). Keep an eye out for shipment misdirection schemes, unplanned route or delivery address changes, unrealistic rates, or inconsistent documents. Don’t be afraid to confirm or double-check information with all parties. Work to develop good business relationships with reliable freight brokers and shippers who have an established presence and reputation. Always trust your gut! If you feel like the situation might be shady, it likely is.
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Soshaul Logistics LLC and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It is meant to serve as a guide and information only and Soshaul Logistics, LLC does not assume responsibility for any omissions, errors, or ambiguity contained herein. Contents may not be relied upon as a substitute for the FMCSA's published regulations. You should consult your own tax, legal and accounting advisors before engaging in any transaction or operation.