The more things change

   It’s hard to believe that we are now halfway through the third quarter of 2015, and closing in on the back-to-school season that kicks-off the frenetic, end-of-year run of holidays. Before we plunge into Q4, let’s take a look back at some of the trends that shaped 2015, and a look ahead at the challenges awaiting the logistics industry in 2016. And let’s not forget that the more things change, the fundamentals of ensuring cargo security remain timeless. 
   2015 is sure to go down as a year marked by extraordinary technological developments, with science fiction becoming ever-closer to reality. For example, never before has the promise of autonomous vehicles seemed so close to being within reach, both for consumers and carriers. Similarly, delivery of parcels via drone has gone from purely conceptual to proven in seemingly no time at all. The “Internet of Things” is poised to catch fire and drive changes—and challenges—that are impossible to fully envision. 
   Yes, technological advances are coming faster and faster, and these new technologies will, as is always the case, present new challenges from a cargo security perspective. For example, how will the industry protect against sophisticated cargo thieves seizing control of Internet-connected drones and trucks by simply hacking into their systems? The same technologies that enable these incredible capabilities can also make your supply chain more vulnerable, and can do so in unpredictable ways. However, this uncertainty should not serve as an excuse to hide one’s head in the sand; instead, it’s an opportunity to revisit those fundamentals of a strong cargo security plan. After all, no matter how much technology advances, most cargo still moves by truck, and will continue to do so long into the future.
   Consider the growing problem of fictitious pick-ups. During a fictitious pick-up, criminals fool companies into willingly turning over loads to them under false pretenses. These elaborate schemes result in the theft of cargo by deception, and include truck drivers using fake IDs and/or the set-up of fictitious businesses. The Internet has made it relatively easy for criminals to create fake companies, produce fraudulent documents, and gain insight into thousands of loads that they never had access to before. The average value of this form of loss is $140,000 and accounts for more than 10 percent of the losses in the industry. 
   Setting up a bogus company is easier than you might think; many criminals rely on readily available prepaid cell phones and credit cards that eliminate any way to trace identities or payment history. The criminals then apply for a post office box and federal tax ID, so when the unsuspecting company does a brief background check everything appears normal. Once established, the company can register with the U.S. Department of Transportation, obtain interstate operating authority, and secure liability insurance online. The thieves then show up with a rented (or stolen) rig that can easily be masked by bogus placards. To complete the illusion, drivers will often wear fake uniforms.
   The thieves hit the Internet load boards, looking for high-value loads from unsuspecting brokers. They prefer long mileage runs, with afternoon pick-ups that are tendered at the end of the week. The thieves know they have several hours before they would normally be checked on, and no one would initially recognize the loss. The fake drivers tender their paperwork, take the load, and then depart…never to be seen again.
   There are several steps that can be taken to ensure that your company does not fall victim to this form of theft:

• Assign personnel to vet each and every carrier used. The carrier you fail to vet will be the one that can burn you.
• Access www.safersys.org to verify company information.
• Verify the carrier’s DOT number, registration and insurance information.
• Call the insurance broker listed on the certificate to confirm the validity and amount of the stated coverage.
• Confirm the carrier’s phone number by not only calling the provided number, but by comparing it to the phone number(s) listed on the carrier’s website. Consider any discrepancy a potential red flag.
• Contact the Better Business Bureau and/or research the carrier at BBB.org.
• Place higher scrutiny on operations using a 714, 786, or 818 area code, as these locales have proven to be epicenters of deceptive and fictitious pick-up activity.
• Make and retain copies of all relevant documents, including the driver’s license.

   In other cases, rather than creating a fictitious company from whole cloth, the would-be thieves actually represent themselves as an existing, legitimate carrier.
   The criminals contract to carry the load as the legitimate company, drive their own truck to a distribution center, and simply pick up the load. Shippers get so complacent with some of the larger carriers that when a driver comes in representing one they simply turn the trailer right over. Obtaining an existing company’s credentials can be as simple as finding their logo and address on their website. A company’s DOT Interstate Operating Authority number is often easily found on numerous websites as well.
   Predicting the future may be a losing proposition, but implementing these common sense, cargo-protection measures is not. As you wrap up 2015 and plan ahead for 2016, be sure to make a robust cargo security protocol a key to your continued success.
   Tabor is a 25-year loss prevention expert and vice president of supply chain support for AFN, a freight brokerage, third party logistics, and transportation management services provider. He can be reached by email.

This column was published in the September 2015 issue of American Shipper.