Help Your Organization Prevent Strategic Cargo Theft

Motor Truck Cargo Worker Preventing Strategic Cargo Theft

One of the many lessons learned since 2020 has been the importance of supply chains and the devastating effects on economies when they are disrupted. For haulers and logistics companies, ensuring that shipments consistently arrive at their destination without issue is crucial for their efficient profitability, day-to-day operations and reputation.

Unfortunately, supply chain disruption has been a growing hazard for the motor truck cargo industry since 2020. In 2022, there were 1,778 reported supply chain disruption incidents, which was up about 15% from 2021. In the second quarter of 2023, there were 582 incidents, a 57% increase from the same quarter the previous year.   

The Issue: Strategic Theft

The most common cause of disruption has been strategic theft, which is essentially criminals tricking legitimate businesses into giving them cargo. Theft in the 2nd quarter of 2023 (including burglary and pilferage) resulted in about $45 million in lost shipments, with the average shipment value per event increasing to $260,703. This is over a 150% increase from the previous year’s average of about $100,000. This jump was due to thieves beginning to target high-value shipments. In 2022, the top targeted commodities were household items, followed closely by electronics, and California had the highest number of reported thefts with a 41% spike from the previous year (Georgia had a 34% spike).

One major reason cargo theft has become a greater problem is because nine times out of 10, incidents are perpetrated by a crime group/syndicate. As opposed to individuals or smaller groups, these syndicates are typically “filling orders” from the black market. Their higher level of organization allows them to gather the latest intel on potential targets and react quickly to market trends, making it significantly more difficult for law enforcement to stop them.

Types of Strategic Theft

Strategic theft can come in various forms. Among the most prevalent forms are misdirection attacks, which occur when criminals use stolen carrier and broker identities to redirect shipments from the intended receiver. Other common forms include conversion schemes and fictitious pickups. Conversion schemes are illegal business practices where organized crime syndicates obtain shipments from brokers and then add fake charges/fees for fabricated reasons. Fictitious pickups typically involve subcontracting to a legitimate carrier and then having the shipment misdirected to another address.

New tech-based/cyber tactics, which crime groups are especially capable of utilizing, are another reason cargo theft is on the rise. Some criminals are using “sniffer” devices that detect GPS, even when embedded in a truck, and then GPS jammers are used to prevent law enforcement from tracking the stolen goods. Cyberattacks, such as phishing e-mails, can be sent to install malware that allows thieves access to the victim’s computer systems and sensitive data. 

Four Key Areas to Focus on to Help Prevent Cargo Theft

If your organization has any level of cargo/inventory exposure, then there are several measures you can take to help prevent, combat and mitigate supply chain disruption. The most effective approach is to find the appropriate mix of tactics across four key areas. Below are some tips for each of these four areas:

1. Training/Culture

A. Provide formal security training for all employees, including supervisors, managers, etc.

B. Incorporate security and cargo theft prevention policies into the employee handbook.

C. Establish regular safety meetings to update employees about the latest trends/issues. 

2. Due Diligence

A. Thoroughly screen employees, partners, brokers, vendors and any other parties involved in the transaction. Strive to only do business with established and reputable organizations.

B. Verify bids with the motor carrier through contact information on file with the FMCSA. In addition, verify that the names of both the motor carrier and driver match the shipment tender.

C. Be wary of new customers who offer payment through peer-to-peer money transfer apps if their business would haul a blind shipment delivered to an address different from the bill of lading.

3. Best Practices

A. Carefully plan to find the safest routes possible, and ensure drivers familiarize themselves with these routes and follow them without unnecessary stops.

B. Implement red zones, which are areas that should be avoided at all times, such as dirt/gravel parking lots with low visibility. If the driver is in doubt, they should not engage.

C. Avoid unattended loaded trailers when possible. If necessary, ensure the unattended trailer is locked.  

4. Equipment/Technology

A. Use GPS and/or telematics for tracking vehicles and cargo, and implement alerts when trucks depart or arrive at a destination.

B. Install interior/exterior video surveillance at warehouses and terminals. Consider installing dashboard cameras in vehicles.

C. Use physical devices, such as air cuff locks, landing gear locks on the trailer, and locks on the rear door.

Third-Party Risk Management

In addition to the measures above, another consideration for your security program should be contacting an established; reputable third-party logistics company that specializes in theft prevention. A variety of services are oftentimes available, including planning and consulting, installing and monitoring systems, physical security (guards), and more. Depending on your organization’s structure and finances, it could make sense to hire a third-party vendor on a one-time/limited consulting basis, or it could be more impactful to establish a permanent relationship.

We're Here to Help - Contact Our Loss Control Consultants Today

Great American Insurance Group strives to ensure that policyholders are not only aware of the hazards they face but are equipped with the necessary tools to prevent and combat them as effectively as possible. Interested in learning more? Talk to our team of experts.

For additional Loss Control guidance, please visit the Plan & Protect safety hub. For steps to help mitigate and reduce losses, visit our Transportation hub


Loss Control Categories

Take proactive action to prepare for different types of loss.