Strategic cargo theft growth pushes industry fraud toward all-time high

Cargo theft has reached at least a 10-year high, and Travelers Scott Cornell believes it’s higher than ever before. 

Cargo theft of all varieties has increased 59% across the U.S. and Canada between the third quarter of 2023 and the same quarter last year, according to recent CargoNet data. This number highlights the continued growth of attacks over the past few years. 

“Much of the increase is due to ongoing shipment misdirection attacks, a kind of strategic cargo theft 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,” according to a recent CargoNet press release.

Different forms of strategic theft –  namely carrier identity theft, double brokering and fictitious pickup schemes – are largely responsible for the massive spike in cargo fraud observed in recent years. In fact, instances of strategic cargo theft increased a staggering 430% year-over-year, according to CargoNet data. Notably this large increase is over a 3rd quarter last year that had already seen major increases. 

Strategic theft is particularly insidious because it often involves fraudsters manipulating the very tools that companies implemented in order to make their supply chains more efficient. 

With strategic theft, like other forms of cargo theft, instituting prevention techniques is the best way companies can protect themselves from bad actors. 

“Prevention is the key,” Cornell said. “Make sure you know who you’re doing business with.”

One of the simplest and most effective ways companies can protect themselves is by verifying the identity of any carrier or freight broker they work alongside.

Vetting partners can be done by researching the company’s information – including provided contact information – via FMCSA or other reliable methods. Drivers should also be positively identified at the point of pickup, and secure pickup numbers should be utilized. 

Bad actors continue to target historical hotspots – including California, Texas, Georgia, Tennessee and Illinois – but their growing ability to steal cargo virtually means that previously unaffected states have also seen an uptick in activity. Arizona as an example has recently entered the top 10 list of states with the highest cargo thefts reported. The strategic theft methods the industry is seeing will expand cargo theft into areas where it was traditionally not as prevalent.

”When you’re basically stealing the cargo remotely, you can steal anything, anywhere, from anywhere. You don’t need to be near those traditional hot spots all the time” said Cornell.

This means that companies operating in regions like the Midwest, Northeast and Northwest should start spending more time and resources preparing to ward off an increasing number of cargo attacks.

No matter where a company is located, partnering with a qualified and experienced insurance company is one of the best things they can do to protect themselves. 

“We use our expertise in these areas to help develop methods to prevent these types of thefts, and in the event they do have a theft, our recovery team responds to try and make a recovery,” Cornell said.

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