The broker was being cheated. He had paid a premium to rent a full truck, which was intended to transport sensitive cargo nonstop to its destination and return empty. At first, everything went as planned, and the shipment was on its merry way. Suddenly, though, something happened. The broker received a so-called “light alert” — an electronic notice that someone had opened the doors of the vehicle.

What happened? A glance at the screen of the broker’s computerized security platform revealed an unsettling fact: The truck was parked at an unauthorized warehouse dock. The evidence was clear. The driver had violated the terms of the shipping contract to make extra cash by filling his free space with another load.

That story is just one example of the security breaches that are happening now more than ever before. “Today’s thieves are utilizing an array of new techniques, from fictitious pickups to ID theft, to cellular  jammers that disrupt telematics,” says Richie Daigle, enterprise account executive at Tive, a provider of real-time shipment monitoring technology. “Modern technology has given criminals the power to plot intricate heists by surveilling distribution centers and monitoring the movement of vehicles around the world.”

“Cargo theft has plagued industries transporting products with black-market appeal as long as commerce has existed,” says Ron Greene, senior vice president of Intel & Fusion Center at Overhaul, a supply chain risk management company. “The high-tech boom of the late 1990s threw gas on the situation, as global supply chains weren’t designed to handle theft-prone products. The previous three years saw cargo theft rates at the highest on record. The COVID-19 pandemic threw a wrench in global supply chain operations, and created increased opportunity for cargo theft, while cargo criminals exploited  technology to aid their craft.”

The increasing incidence of cargo theft is hitting the bottom lines of players throughout the supply chain: shippers, retailers and logistics service providers. Estimated losses now top a staggering $30 billion per year in the U.S. alone. And the problem is escalating as thieves are becoming more sophisticated in their methods: In 2023, CNBC reported that the U.S. experienced a 600% increase in strategic cargo theft,  wherein criminals employ cyber scams, identity theft, and other advanced tactics to target victims.

Of particular concern is cross-border traffic with Mexico, given the nearshoring trend that has increased the dependency of the U.S. on its southern neighbor. “Manufacturing that was originally in Asia is now being done in Mexico,” says Jose Luis Anselmi, founder and chief strategy officer of Assistcargo Risk Management. “Theft of goods inside that nation increased by more than 48% in the past two years, according to the Mexican Association of Automotive Dealers. Nearly 6,000 trucks are stolen every year.”

Seaports are also major security hot spots. “There is a tremendous amount of theft in major ports,” says Daigle. “Cargo coming from overseas ends up moving out of international containers and into domestic ones. Some freight is moved onto rails and onto long-haul trucks, and these transfers introduce a lot of complexity. Thieves take advantage of the confusion by playing shell games, and a lot of freight goes missing.”

Enablers

What’s driving the surge in crime? One culprit is a tougher operating environment for truckers. During the pandemic, a surge in consumer shopping led to insufficient capacity, so rates shot through the roof and trucking companies both small and large were making record profits. More people got into the trucking business; current operators added more vehicles, and capacity boomed.

The post-COVID world has brought about a reversal of fortune. When consumers redirected their spending toward services such as restaurants, travel, and entertainment, demand for shipping services dropped at a time of sky-high supply. “Today, capacity is at an all-time high,” says Daigle. “As a result, it’s very, very difficult to make money in transportation. Shippers are going lower and lower on price just to get business.” As truckers struggle to make ends meet, the temptation to cut corners increases.

The rise in cargo theft takes many forms. Sometimes truckers, like the one in our opening anecdote, pick up extra bucks by popping the doors off their truck hinges — and loading more shipments in the available space. This tactic, labeled “consolidation” by the trade, might seem harmless to outsiders. But it can harm shippers in many ways. For one thing, unauthorized stops can extend the transport time — so deliveries end up arriving late at customer receiving docks.

There can also be damage to products being shipped. Clandestine opening of doors can facilitate theft, especially if the freight consists of controlled  substances or high-value goods. Refrigerated cargo can be damaged by temperature changes, and other products can be affected by fumes emitted from unvetted freight. Finally, of course, there’s the loss of the premium the shipper paid for a full truck rental.

Consolidation, though, isn’t the only way that bad actors steal from shippers. Here are three more:

Rerouting. Thieves can use social engineering to reroute deliveries, and advances in technology have facilitated this brand of theft. “We’re seeing more and more cyber hacking into trucking management systems,” says Daigle. “The thieves typically acquire just enough information about a specific load to pose as the shipper. Once they have obtained the origin and destination point — and the nature of the transported goods — they call the driver and state that the shipment needs to be rerouted to a location in another city. That new location, of course, is where the thief takes control of the freight.”

In a variation on this misdirection theme, a nefarious truck driver may either fake their own motor carrier number or find another one that isn’t theirs. They show up at the dock, pick up the freight, and leave — and the merchandise is gone forever. Once goods are stolen, technology can also help move them into the hands of unsuspecting customers. “It’s easy for people to sell electronics or other merchandise today simply by setting up an online store through eBay, or Amazon, or any kind of online portal,” says Daigle.

Double brokering. In another form of fraud, the broker offloads a job to another brokerage firm — rather than finding a trucking company to move a shipment. “This creates legal complexity when the first broker has collected money from the shipper but refuses to pay the second broker,” says Daigle. “Now the truck driver hasn’t received any money, and it can get very confusing about who’s liable for the payment.”

Theft. Sometimes thieves just plain loot trailers of their contents. “There’s a tremendous amount of actual theft that’s happening right now,” says Daigle. “Somebody might slip a truck driver $500 and say, ‘Why don’t you go down and have a nice, long lunch and leave your truck?’ Then the thief pops the doors and either empties the entire truck or trailer, or just pilfers some merchandise off the top to make it look like nothing’s missing. At Tive, we have seen instances in which thieves will go through and  remove TVs from boxes, then reload the boxes so the truck still looks full. It takes a long time to notice the empty cartons — and by that time it’s difficult to figure out what happened.”

Technology Solutions

Fortunately, shippers can defend themselves against these forms of transport theft.

“Mitigating cargo theft requires a layered security approach to protect cargo at all points across the global supply chain,” Greene says. “The first step is understanding how the cargo is moving, then building in security protocol to address vulnerabilities. Real-time tracking and visibility enable low-cost security programs to be deployed. Technology isn’t a silver bullet, but it can be leveraged to enable a robust security program.”

“The key to preventing and mitigating the effects of this type of crime is to maintain real-time, item-level cargo visibility technology by mounting sensors on the vehicle itself and in the cargo,” says Anselmi. “These sensors allow for the active remote monitoring that discourages inappropriate behavior by personnel involved.”

Security sensors constantly monitor cargo location and condition — and send alerts when suspicious events occur. Unauthorized stops or deviations from assigned routes, for example, can be identified through cell tower triangulation. Clandestine openings of truck doors can be detected by changes in temperature, humidity, or vibration patterns, or by unexpected rays of light (as evidenced in the opening anecdote).

Timely alerts provide shippers with the opportunity to respond immediately to warnings about a security incident. “Taking appropriate action during the first few minutes of a robbery is critical to avoiding loss,” says Anselmi.

While this onboard visibility is important, its effectiveness requires some advance planning before the truck leaves the loading dock. “Security personnel must draw up a plan that defines the authorized routes and stops,” says Anselmi. “The details in that plan can later be matched against the data the sensors transmit en route.”

Thieves, of course, will try to circumvent shippers’ defenses. “The bad actors are savvy as to what’s happening in the security field, and they will do what they can in response,” says Anselmi. “In Latin America specifically, people are using jammers to disrupt the signals from sensors when trucks pass through areas controlled by cartels. But the most modern of security devices are resilient against jammers.” Hardware sensors, of course, cannot do their work in isolation. Quality software is also required, along with teams of trained personnel who can set appropriate alerts — and communicate with local law enforcement agencies when breaches occur. Some companies maintain in-house global security operation centers (SOCs), while others engage the skills of outside specialists.

Every link in the security chain is important, and weakness in any one area can result in substandard information and lost cargo. But the good news is that in an environment of ever-increasing risk, shippers can take steps to protect their transports by implementing leading-edge technologies. “Theft is a bigger problem now than ever before,” says Daigle. “It’s more a matter of WHEN rather than IF a breach will occur. Being proactive is the smart thing to do.”

Resource Links: https://www.tive.com/