As cargo theft climbs, you can help prevent it

Cargo theft in Canada and the U.S. has been rising dramatically.

In the third quarter of 2023, thefts increased by 59 percent over the same quarter last year, according to CargoNet.  The organization says 692 thefts during the quarter cost the industry over US$31 million.

According to CargoNet, the majority of the thefts were shipment misdirection attacks, in which actors use stolen motor carrier and logistics broker identities to obtain freight and misdirect it from the intended receiver so they could steal it.

In a release, the organization said it anticipates strategic cargo theft will remain at unprecedented levels of activity throughout the final quarter of the year. “We caution the industry that throughout this year, strategic cargo theft rings have picked up activity around holiday periods. Additionally, strategic cargo theft groups have widened their preferred commodity targets to include truckload shipments of metal like copper, brass, and aluminum, apparel – especially officially licensed sports apparel, and shipments of personal care and beauty products,” the statement read.

They added that strategic cargo theft groups continue to pioneer new methods that seek to evade common compliance practices used by logistics brokers. “Strategic cargo theft groups have shown keen interest in perpetrating fraud against small motor carriers or owner/operators with intent of hijacking their accounts or convincing them to solicit shipments from logistics brokers on their behalf. Both strategies seek to evade identity theft checks a logistics broker may do prior to tendering a shipment.”

What happens to the stolen goods?

As the industry seeks to understand the way that criminal networks operate, it is worth questioning what happens to goods after they are stolen. Organized criminal networks employ many of the same ‘business’ strategies used by legitimate supply chain operators. Police forces regularly find large warehouses containing stolen goods, trucking operations engaged in the movement of those goods and incidents of  stolen goods entering the retail market.

“Earlier this year two containers of BBQ equipment destined for a retailer were stolen from a depot in the UK. Two months later the owner of the goods, shopping in another retail store recognized the equipment and, by tracing the serial numbers, was able to identify them as those stolen earlier in the year,” recounted Mike Yarwood, managing director, loss prevention at insurer TT Club.

A ongoing legal wrangle has ensued, but as Yarwood explains, “The moral of the tale is that a relatively ready market for stolen goods is accessible to thieves if unknowing ‘receivers’ do not take sufficient care to ensure the goods they purchase are legitimate.”

TT is promoting the need for more vigilance and is offering tips for procurement managers to help prevent becoming inadvertent receivers of stolen property. These include:

• Forming strong, ongoing partnerships with trusted suppliers and thoroughly vetting all new suppliers;
• Implementing a code of conduct that explicitly forbids unethical and illegal procurement practices, including whistleblower protection;
• Verifying the provenance of all goods. All incoming goods should be accompanied by documentation such as bills of sale, invoices and shipping records;
• Initiating regular audits to be conducted by an external party and conducting particularly stringent due diligence when procuring high-risk goods, such as electronics or luxury goods;
• Engaging with law enforcement immediately if suspected stolen goods are identified.

“A recent study by the University of Plymouth valued the cost of goods stolen in the UK alone during 2020 at £95.7 million ($163 million). However, the cost of the goods fails to take into account many other factors that impact on the businesses involved,” Yardwood said.

“Every theft costs the transporter wasted resource as that particular order was not delivered; survey costs to assess the value of the lost cargo are incurred and, most importantly, reputational damage occurs that may lead to the future loss of business. Moreover, insurance premiums will rise for all participants.”

The wider impact on society at large include the funding of criminal organizations, which leads to not only further freight crime but other criminal activity. The sale of stolen cargo is believed to be one of the primary revenue streams for organized criminal groups around the world.