Scammers impersonating and taking the identities of legitimate carriers and brokers to steal loads for a quick payday is at an all-time high, according to Scott Cornell, transportation lead and crime and theft specialist at Travelers.
Cornell said Travelers is seeing a higher incidence of double brokering for strategic cargo theft. That involves criminals using stolen motor carrier identities or operating authorities or even a broker’s identity to obtain freight and misdirect it from the intended receiver in order to steal it.
“Double-brokering fraud has been around for years, but it’s definitely increasing,” Cornell told FreightWaves in an interview. “Strategic cargo theft in general has had massive increases from 2022 to now, and we continue to see that this enables the organized cargo theft ring to be at arm’s length from the theft itself.”
Saint Paul, Minnesota-based Travelers (NYSE: TRV) is one of the largest commercial property casualty insurance writers in the U.S.
Cargo theft jumped an additional 46% year over year (y/y) in the first quarter of 2024, according to CargoNet, a subsidiary of data analytics firm Verisk. CargoNet documented 925 incidents from January through March, a 10% rise from the fourth quarter of 2023.
The average value of stolen shipments in the first quarter was $281,757, while the declared total value was $76 million. By extrapolating the average shipment value across events without a declared value, CargoNet estimates that a total of $154.6 million worth of goods was stolen in the quarter.
While reported cases increased in most states, the most significant spikes were in California, with a 72% y/y increase, Illinois, with a 126% y/y increase, and Texas, with a 22% y/y increase.
While simple cargo theft, which includes the theft of unattended, loaded trailers and pilferage of unattended, loaded trailers, remains a persistent issue, Cornell said Travelers is seeing rising theft from complex fraud schemes, including:
More impostors: International groups of organized criminals learning how to trick companies by using stolen identities, fake emails and/or IP phone numbers.
Advanced technology: The technologies that supply chains use to be more efficient and faster are the same ones cargo thieves take advantage of. This means cargo owners need to be in the know about every movement of their goods, and with double brokering on the rise, they need to pay even closer attention.
“With straight cargo theft, which is the method where you go straight out to the freight and you steal it where it sits, maybe in parking lots, drop lots, a cargo thief, for those types of thefts, has to be on-site, which puts them at higher risk,” Cornell said. “With this newer double-brokering scam, thieves are able to be anywhere and target freight anywhere. Now they don’t have to be on-site. They don’t have to put themselves at risk. They are arm’s length away most of the time.”
Retail crime networks are expanding operations to include cargo theft, targeting entire truckloads of goods and even taking orders for specific freight, Cornell said.
“These crime rings, they are internationally based, so they are nowhere near where the crime is actually being committed, and through fraud they’re using a legitimate carrier to go do it,” Cornell said.
Certain commodities, such as small appliances, liquor, energy drinks and copper, were heavily targeted by thieves in the first quarter, according to CargoNet.
More international crime rings are using double brokering to target specific truckloads, according to Cornell.
“It’s become one of the most common, if not the most common, method that we’re seeing in the industry right now. It’s highly effective, and it is happening all over the U.S.,” Cornell said. “A big part of what we are seeing is that rather than all of the traditional hot spots for cargo theft — around the ports in Southern California, Texas, Florida, Memphis, Illinois, the Chicago area, all those places are still hot spots. No question.
“[But] double brokering has allowed thieves to target freight in nontraditional cargo theft areas. Arizona has recently entered the top 10. We’re seeing more cargo theft in Nevada. We’re seeing more cargo theft in Midwestern states where we traditionally have not seen cargo theft. That’s because a thief can now be anywhere and target freight anywhere. Now it’s more about what freight they want.”
To protect themselves against fraudulent double brokering, Cornell recommended carriers and brokers look for red flags.
“I can give you some really basic ones, such as you have somebody bidding on a load in the southwestern U.S. when all of their inspections are in the Southeast or in the Northeast,” he said. “Or you have somebody who says, ‘We can take four or five loads,’ but when you look at their Federal Motor Carrier Safety Administration profile, they have two trucks, right? You know they say they have five trucks, but when you run your analysis report on them, they don’t have the miles or anything that reflects that they would have five trucks.”
Cornell said another red flag could be people claiming to be based in the U.S. but their phone calls come from another country.
“Cargo security has to become part of the culture of the way you conduct business going forward, much like safety became part of the culture of the supply chain,” he said.
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