Strategic cargo theft is a rapidly growing concern
When it comes to freight theft, criminal tactics have shifted from straight theft to strategic theft as criminals are using new technology to bolster fraud and deception. The post Strategic cargo theft is a rapidly growing concern appeared first on FreightWaves.
Scott Cornell, Vice President of Transportation at Travelers Insurance, sat down with FreightWaves’ Timothy Dooner on the May 19th episode of What the Truck?!? to discuss the evolving landscape of cargo theft that continues to plague the freight industry.
While straight theft (the physical taking of trucks, trailers, or cargo from where they’re parked) remains the most common form of cargo theft, criminal tactics have shifted in the last few years. “Strategic theft,” which involves deception and trickery to gain possession of freight, has skyrocketed by 1,475% between Q1 2022 and Q4 2024, according to CargoNet data.1
“Strategic theft went from roughly 3 percent of all theft to about 33 percent in that two-year period,”2 Cornell said. This dramatic increase has created significant confusion and challenges across the industry.
One of the most notable developments is how cargo theft has gone international. Cornell pointed out that organized rings now operate from multiple countries, targeting freight anywhere in the world through internet-based schemes.
“Somewhere between 2020 and 2022, cargo theft, specifically and more frequently strategic theft, went global,”1 Cornell said. “Now you can basically be anywhere and target freight anywhere because you’re doing it over the internet, over your computer, over your phone, using these deceptive methods.”
The most prevalent strategy, Cornell says, begins with identity theft. Criminals steal a trucking company’s identity and bid on loads. If they pass the broker’s vetting process, they pivot to impersonating a freight broker and hire legitimate trucking companies to move the freight.
“That legitimate trucking company has no idea that they’re being involved,” Cornell explained. The thieves then redirect the cargo to alternate locations, often cross-docks, where they begin laundering the freight by changing documentation and descriptions as it moves through multiple facilities.
Less common, but potentially more devastating, cluster theft involves criminals establishing seemingly legitimate trucking operations by purchasing MC numbers. They build trust by hauling loads legitimately while gathering intelligence about procedures, routes, and volumes.
“Criminals can be very patient, and they’re really good at return on investment,” Cornell said. “They’ll haul for you for a period of time in order to gain intel.”
Eventually, they begin “shorting” loads, a process that involves removing most of the cargo but altering paperwork to show smaller shipments with matching seal numbers. This can continue for months before being discovered, resulting in massive losses across dozens or even hundreds of loads.
New technology, particularly AI, is creating new opportunities for theft. Cornell says that while AI will likely be used by criminals, it will also be deployed defensively, creating an AI versus AI security landscape.
However, human intervention remains essential. “I don’t think you can ever eliminate the human part of it,” Cornell said.
In one example, someone relayed a story to Cornell in which a criminal was pretending to be based in Memphis and using AI to spoof a freight load.
“The human on the other end of the line says, ‘what’s your favorite barbecue place in Memphis?’ The scammer couldn’t answer. That sounds like a small thing, but that human element is what gave the scam away,” Cornell said.
All industry stakeholders have to remain vigilant in protecting information and verifying transactions, because innocent parties can be unwittingly used in all kinds of schemes. For truck drivers specifically, Cornell says, it’s important to remember that drivers are liable for cargo accepted in good condition. “If the cargo doesn’t make it to delivery, you can be on the hook for the loss,” he said.
There are several crucial protective measures, according to Cornell: carefully review shipping documentation for discrepancies, stay alert to red flags in communications and procedures, and secure appropriate cargo insurance policies.
“Vigilance and timely communication are critical to prevent these kinds of crimes, and the right policy is vital to protect your business from potential loss,” Cornell said.
The transportation industry remains a prime target for increasingly sophisticated theft operations. By understanding these evolving tactics and implementing appropriate safeguards, shippers, carriers, and brokers can better protect themselves against costly and disruptive crimes.
“You might think you have your physical operation down, and you might think you have your warehouse locked down,” Cornell said. “It doesn’t matter. Criminals are focusing on strategic theft. They’re pulling loads off your board and they’re spoofing identities, so they’re going to go right through your system. Be smart. Get the right protections in place and use that human and that digital element.”
Click here to learn more about Travelers Insurance.
1 2024 First Quarter Supply Chain Risk Trends Analysis
2 Verisk – CargoNet Report: Strategic Theft January 2025
The post Strategic cargo theft is a rapidly growing concern appeared first on FreightWaves.
