Watch out: 5 reasons cargo theft is a top concern for trucking

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Fleet Owner  /  November 2, 2016

For the first time, insurer Travelers brought its Sting Trailer crime-busting tool to the American Trucking Association’s safety, security and human resources gathering last week and gave attendees tours. Fleet Owner caught up with Travelers transportation crime and theft specialist Scott Cornell to hear the latest on cargo theft — and five reasons why it has many in the freight and distribution business concerned.

1. It's a very big problem.

The scope of cargo theft in the United States is broad and extensive. "It's a much bigger cost than people realize," Cornell says. The FBI, he adds, places the annual economic toll cargo theft takes somewhere in the range of $15-$30 billion, depending on how you count, which is more than auto theft or all employee theft at the workplace.

Why such a range? Cargo theft is often reported under various crime codes, Cornell explains, and there's debate about how you tally it up.

"Is it just the cost of the TVs on a trailer that were stolen, for example, or is it that cost and the cost of replacing them — manufacturing them again, reshipping them, the value the store lost by not having TVs on its shelves?" he notes. "How much did 'company A' lose by not having those items in a given week when their competition did?

"There are all sorts of costs associated with cargo theft," Cornell says.

2. No matter where or when it happens, the crime essentially can be invisible.

Even if it's taking place in broad daylight and right under people's noses, chances are good they might not even notice.

"How many times have you pulled into a shopping mall and seen a tractor and a trailer there in the parking lot?" Cornell muses. And the obvious answer could be any or every time — as the distribution method for about four out of five goods or packages to stores across the nation, trucks and trailers frequently, if not nearly always, go hand-in-hand with shopping malls, storefronts and other places of business.

As a result, it'd be quite normal to see a truck pull up to a trailer, hook up and pull away, even if a particular instance of that happens to be cargo theft.

Alternately, cargo theft can take place out of the public's view in areas like industrial parks where trucks are picking up and dropping off loads or in dark lots where tractor-trailers are parked for the night. And in that case, it's simply "out of sight, out of mind" when it comes to being noticed.

"Cargo theft is one of those things where it affects everybody, but you don't see it or necessarily feel it up front," Cornell tells Fleet Owner. "And you don't realize when you buy that TV or cell phone that there may be some cost associated with cargo theft in that purchase — you just see it as the cost of the item."

3. A worrying new trend has been emerging.

There've been several major trends in cargo theft, Cornell notes, and the nation may now be facing another.

Following the economic calamity of 2008, he says cargo thieves began to shift from high-dollar items like electronics and target more food and beverage items — things like nuts, energy drinks and frozen meats and seafood.  "I kind of joke that cargo thieves are good capitalists. They understand that if they steal it, they have to be able to sell it," Cornell contends. "People didn't have the extra money for expensive electronics." And there are other benefits: if you steal food and beverage items, the evidence tends to be consumed and disappears quickly.

Then around 2011 and 2012, another trend was that cargo thieves began to commit less straight cargo theft — you pull up to a standing trailer and haul it off on the sly, for example — and more strategic cargo theft. Straight cargo theft is still most common, but strategic cargo theft includes things like identity theft, fraudulent carriers and fictitious pickup.

"With identity theft, somebody poses as a legitimate trucking company, books freight, picks it up and then disappears with it," Cornell says. "Everybody eventually realizes what happened, and it's a scramble to try to figure out where the load went."

With fictitious pickup, thieves find out about a load to be picked up by a legitimate trucking company, "and the classic example is that they show up a couple hours early and say, 'Hey, here's our paperwork — we got here a little early. Can you load us up and get us out the door?'" he explains. A key point with identity theft or fraudulent carrier crimes is that there's more contact with the criminals and more of a potential trail of leads to investigate, Cornell notes, whereas you don't have that with fictitious pickup.

Now the latest trend: cargo thieves are taking to more advanced technology. "We've seen more involvement with cybercrime. We've seen thieves use 'sniffers' to find covert tracking devices in trailers and jammers that take out tracking devices, so they can steal the cargo even if you have a tracking device in there," Cornell says.

And for a new twist, how about 3D printers? "We've seen the use of 3D printers to duplicate seals," he adds. "They can break a seal on a truck, take out part of the load, and then create a duplicate, fake seal with a 3D printer to close the trailer back up. So we're seeing a solid increase in the use of technology."

4. By nature, cargo theft is attracting more intelligent criminals.

Some criminals are just plain stupid, and that makes them easier to detect and catch. Unfortunately in that regard, cargo theft actually offers a lot of "perks" and tends to attract the thinkers, and here's why.

Not only has there been the increase in technology involved as noted in No. 3 — which indicates cargo thieves are often a more sophisticated, savvy bunch — but cargo theft has a nice, low overhead.

Even with lower-value loads like stolen foods and beverages, "it can be a good 'return on investment,' if you look at it that way," Cornell explains. "Or let's say you get a load of electronics worth $500,000 and you can sell it for $200,000-$250,000, maybe even $150,000, depending on how quickly you want to move it.

"Keep in mind, that's all profit. It's not like cargo thieves have a storefront," he continues. "So even if they sell a $500,000 load for $150,000, their profits could be through the roof."

And this isn't like Wild West train heists: cargo theft today is also, by and large, nonviolent. "Depending on what numbers you read, less than 2-3% of cargo theft in the U.S. involves violence," Cornell notes. "So you have a high-dollar crime with a large take, a high profit margin, and you don't have to be violent to do it.

"There's so much freight just sitting out there," he adds. "So if I'm a bad guy, why would I want to increase my chances of going to jail for a longer period of time? I'll just take the stuff I can get easily, and if I stay away from violence, even if I do get caught, I won't have all those mandatory minimum sentences that go along with violent crimes."

5. It's not just the holiday season anymore.

Even recently, trucking companies, shippers and others in the distribution business could expect more of a seasonal nature to cargo theft. But those times may be a-changin'.

"It used to be pretty consistent: from Sept. 1 on, we would start to watch cargo theft tick up. It was kind of fourth quarter, Christmas cargo's on the move," Cornell recalls. Expecting a surge, investigators and law enforcement would "get geared up and get ready for it," while companies involved in distribution "would kind of brace themselves and be ready to answer that phone quickly," he notes.

That's begun to change in the last two years or so. "It's been less consistent. It still goes up and we still see an increase in thefts, but what we've ended up seeing is more targeted increases — maybe we'll see more alcohol stolen around the holidays, maybe some more video games and video consoles, things like that," Cornell says.  "So we still see an uptick, but it seems like cargo theft is kind of leveling out more across the year. We're not seeing the peaks and valleys we used to see."

And while that doesn't mean there won't be a spike in cargo theft this holiday season, Cornell notes, the takeaway for fleets, trucking companies, shippers, freight brokers and others is this: You need to be vigilant not only seasonally but all the time for cargo theft, and the criminals you're facing are often very clever and adaptable.

There may be things you can do to give yourself an advantage. Travelers is the only insurance company to have a dedicated cargo theft unit, according to Cornell, and it's been in operation and growing since late 2004. The unit works with law enforcement to find and eliminate cargo theft rings and recover stolen goods, and also works with Travelers customers to train them on the best ways to prevent thefts from happening.

"We have this dedication with our special investigative group and our knowledge and expertise behind this. We think we give you an advantage; we think we bring an extra level of capability to our insureds," he contends.  

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As Freight on Trucks Becomes More Valuable, Thieves Get Creative in Their Attempts to Steal It

Gary Frantz, Transport Topics  /  November 15, 2018

Virtually every commercial big-rig truck rolling down the highway these days is carrying goods that can represent hundreds of thousands of dollars, if not more than a million. For cargo thieves, those are inviting targets that are easy to attack, and in many cases the products can quickly be turned into cash on the black market.

It’s an ever-evolving threat to motor carriers. Keeping cargo safe means defending against not only traditional methods but recognizing and overcoming emerging new tactics and techniques increasingly employed by the bad guys. These can include social engineering, “spoofing” technologies, identity theft, fictitious pickups using bogus shipping documents in which thieves impersonate legitimate drivers and companies, and criminals doing covert, organized site surveillance and intelligence gathering to plan a heist.

“There are some things about cargo theft that haven’t changed that much over the years,” said Scott Cornell, who as crime and theft specialist at Travelers Insurance leads the company's transportation business and helped create its cargo theft investigation unit in 2005. Yet there have been significant changes, he said, including targeted commodities, technology-enabled cargo theft and criminals organizing into more sophisticated and dangerous groups.

It’s enough to keep fleet safety and security managers up at night. However, the most effective defense against cargo theft is an educated, alert and aware driver. And that’s where fleets continue to spend time, effort and money to support drivers, keep them safe and their loads out of harm’s way.

According to Sensitech’s second-quarter 2018 U.S. and Canada cargo theft analysis, 157 cargo thefts were reported in the period, slightly down from 2017. The average cargo value per theft event was $186,779 for a total of $29.3 million in losses. The thefts involved 342 stolen vehicles, including 120 semi-tractors and 155 semi-trailers. The most targeted goods: food, building supplies, household goods such as appliances, and electronics, including computers and televisions.

Major over-the-road fleets engage drivers in formal training and education programs for safety, cargo security and theft prevention.

Every driver with CFI undergoes orientation that stresses personal safety as well as cargo and equipment security, said Jeff Messer, security and safety analyst at the Joplin, Mo.-based truckload carrier, which has 2,000 drivers.

The company communicates regular updates to drivers on cargo theft trends, prevention techniques, “hot spots” for theft to steer clear of or be extra vigilant about when dropping or picking up a load, as well as law enforcement bulletins and other safety-and-loss-prevention intelligence.

Messer’s prevention tips for drivers: Always be aware and attentive to your surroundings. Be well rested. Use the restroom before departing. Have snacks already in the truck. Preplan your first stop. Do a thorough walk-around inspection of the truck — before and after any stop — and be fueled up prior to picking up a load. In a situation where a driver encounters a theft in progress, Messer says to call 911, then call the company security hotline.

“A good witness is better than an endangered driver,” he said.

CFI, similar to other carriers and security experts, recommends that upon departure, drivers travel without stopping for a minimum of 200 miles. A thief may trail a truck for an hour or so, but seldom will a thief go beyond that because most personal vehicles will need to stop and refuel. The company’s trucks also are equipped with GPS and devices that can be activated to render the truck inoperable.

While the highest incidence of cargo theft tends to occur on the full-truckload side of the business, less-than-truckload carriers are not immune. In the LTL arena, the threat is mostly internal, where an employee may be approached by an outside perpetrator and encouraged to collude with the thief in a scheme involving a customer or goods at the trucking terminal.

The key to prevention is regular, constant communication with all employees, ensuring they are aware of proper security and threat prevention procedures and protocols, said Geoff Stephany, director of cargo claims and security for Thomasville, N.C.-based Old Dominion Freight Line.

“If you see something suspicious, know who to call and what to do,” Stephany said.

The fleet preaches “see something, say something,” he said, noting the company’s top deterrent is informed and educated employees.

ODFL ranks No. 11 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.

Meanwhile, there are two common types of cargo theft, Travelers’ Cornell said.

A “straight” theft is one in which the cargo is stolen from the location where it sits. These usually are crimes of opportunity, in which a thief is looking for whatever can be stolen easily and sold quickly. Crimes such as these usually occur at a truck stop, a drop lot or other area where cargo is left unattended. The most common: a store parking lot or unsecured empty lot where a trailer is parked for the weekend, awaiting a Monday delivery.

Countermeasures include not leaving trailers unattended or unmarried to the tractor, especially in remote or unsecured areas, and using high-security rear door locks and air cuff locks, Cornell said. Also, if the trailer can’t be moved to a secured area, or to the consignee’s secured warehouse and lot, consider installing landing gear locks as well.

The other category, Cornell said, is “strategic” cargo theft. This method continues to evolve rapidly and is one in which the perpetrator is using deception or unconventional methods to trick the shipper, broker or carrier into giving up the load.

One of these emerging techniques involves “social engineering.” In this case, the thief scours the internet for specific products, companies and warehouse locations while looking at public load boards for specific loads that match the products they want to steal. Thieves may even post false loads to load boards and solicit bids to get the information on the carrier they need to steal an identity, according to Cornell.

Cargo thieves often look for loads late in the afternoon or on a Friday, figuring that the traffic manager is under pressure to get the load off the dock and will be less diligent in checking the bona fides of the driver.

In this case, the perpetrator is impersonating the legitimate carrier. The thief shows up at the shipper an hour or more before the scheduled pickup, saying he’s early and wants to get on the road. The thief then will present forged paperwork, and in some cases may have the truck logoed and painted in the livery of the true carrier to appear legitimate. The shipper, not knowing it’s a fictitious carrier, lets the shipment go.

Double-brokering scams, identity theft, deception schemes and organized crews doing targeted surveillance, as well as hybrids and combinations of these, are examples of strategic cargo theft tactics being used by sophisticated perpetrators.

Cornell suggests the following practices for shippers to protect against “strategic” cargo theft:

• Research carrier information though legitimate sources including the Federal Motor Carrier Safety Administration, third-party vetting companies and industry associations.

• Work only with legitimate and licensed brokers that have strong controls in place for vetting carriers, ensuring their legitimacy and protecting cargo security.

• Always check for positive driver and truck information at the pickup point. Verify the driver, truck and pickup confirmation numbers. If any suspicions arise, call the carrier or broker to verify and confirm the veracity of the driver. If the driver tries to give you a number, saying, “Here, call my dispatcher,” don’t use that number. Use the confirmed number and contact you already have for that carrier or broker.

Nick Erdmann, business development manager for Transport Security Inc., has found that most thefts are planned. “Most thieves know what is coming out of a certain area, what’s being shipped,” he said.

His company provides high-security trailer and container locks, truck locks and covert GPS tracking technologies.

Often, a thief will scout a warehouse or trucking company terminal, watching and recording when trucks arrive and depart, and when cargoes would be most vulnerable. Sometimes thieves will even test a site’s security measures, purposely setting off a perimeter alarm and then seeing who reacts and how long it takes for law enforcement to arrive. That information is used to plan the heist.

Another tactic: marking a trailer with a Sharpie pen or spray paint, essentially tagging the trailer, or attaching a portable GPS tracking device, hidden on the trailer. The thief then follows the trailer, and when parked, either breaks into it or steals the entire trailer.

Erdmann’s advice to drivers: “Don’t talk about your loads to anyone, at a truck stop or on the CB. Report any suspicious activity.”

As for ODFL’s drivers, Stephany coaches on the fundamentals. Never leave a truck’s cab unlocked — even when moving. Always lock the trailer after every stop.

“If your gut tells you something is not right,” Stephany said, “it’s probably accurate.”