April 29, 2014

Reported cargo theft incidents down in 2013; cybercrime rises dramatically, report says

Fictitious pickups accounted for more than 9 percent of all theft last year, CargoNet report shows.

By Mark B. Solomon

Reports of theft of physical cargo in the United States decreased by 9 percent in 2013, a drop-off that may have been due to a corresponding rise in so-called cybercrime, according to a soon-to-be published report by CargoNet, a leading security group.

According to the report, CargoNet recorded 1,090 incidents of cargo theft during the year, down from 1,197 incidents reported in 2012. Most of the year-over-year decline took place in the first half of 2013, CargoNet said.

By contrast, CargoNet reported a 36-percent increase in so-called fictitious pickups, where criminals create phony businesses and use fake identifications to steal loads from unwitting shippers. These types of crimes are less risky and less physically demanding than stealing a trailer from a truck yard, the report said. In addition, cyberthieves are harder to catch and less likely to be arrested and prosecuted, according to the report.

Fictitious pickups accounted for 9.3 percent of all reported cargo theft in 2013, the report said. Cargo theft in general has historically gone underreported because victims are loath to make the information public.

The average value of cargo stolen in a fictitious pickup last year was $154,134, a 3-percent increase over 2012, the report said. Most of those incidents involved the pilferage of food and beverage shipments because they are relatively easy to fence, the report said.

About half of those pickups occur on a Thursday or Friday, when shippers and brokers are anxious to move freight out the door and get it on the road by the weekend. Weekend pilferages in general are favored because thieves realize they will have more time to disappear with the stolen goods before a theft is reported.

Still, the vast majority of cargo theft is of the physical variety, with trailers hoisted from parking lots, truck stops, and carrier yards. Parking lots were the most common specified locations of theft between 2010 and 2013, according to data from the Supply Chain Information Sharing and Analysis Center released earlier this month at the Transportation Intermediaries Association's (TIA) annual conference in Tucson, Ariz.

Beverage, electronics, and apparel shipments have always been at or near the top of criminals' hit lists. In the past four years, however, there have been more thefts of "metal" shipments than any other commodity type, according to the Supply Chain Information Sharing and Analysis Center. That's because many metals shipments don't contain serial numbers and are thus harder to trace, according to security experts at the conference.

Quantifying the cost of cargo theft has become a difficult exercise. In the past, CargoNet has used numbers from the FBI estimating that that theft of physical cargo costs U.S. business about $35 billion a year. However, since the 9/11 terrorist attacks the agency has shifted most of its efforts to homeland security and no longer keeps close track of cargo theft data, according to Walt Beadling, managing partner of the Cargo Security Alliance, another security group.

The cost of financial and identity theft, two forms of fraud becoming more prevalent in the motor carrier supply chain, are even harder to quantify since they are relatively newer forms of fraud.

A large portion of financial fraud involves the theft of cash advances that were to be used to pay for essential expenses like diesel fuel. Brokers at the TIA conference said the competition to find trucks and qualified drivers has become so intense that they feel they need to offer cash advances as an incentive to attract drivers and capacity.

Identify theft is gaining traction because of the rise of sophisticated digital tools that allow criminals, some of whom operate thousands of miles away, to recreate near-perfect replicas of legitimate documentation, including commercial drivers' licenses.

The overall fraud problem has become so widespread that TIA at its conference announced the formation of an anti-fraud task force comprised of security experts across the truck supply chain. The task force's objective is to "design a framework" to help members protect themselves from various forms of fraud, according to Geoff Turner, TIA's chairman and president of Choptank Transport, a broker and third-party logistics provider (3PL) in Preston, Md.

About the Author

Mark B. Solomon
Executive Editor - News
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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