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Cargo Theft Claims Increase Almost 60%

Posted by Steve Babcock on Feb 13, 2024 10:52:20 AM

CargoNet, a company specializing in tracking cargo theft, recently released new data that revealed a surge in incidents across the United States and Canada during the third quarter of 2023. According to the firm, total thefts reached 692 events, marking a substantial 59% rise compared to Q3 2022. The theft totaled $31 million in losses, making it one of the most costly cargo theft quarters recorded. The firm also released findings on theft methods and urges increased precaution and security measures as we head into 2024.

Cargo Theft Trends

The findings showed that many cargo thefts were attributed to a method known as shipment misdirection. Criminals use shipping misdirection tactics to obtain and redirect cargo shipments fraudulently. These tactics use legitimate processes within the shipping industry, making the fraudulent aspect challenging to detect until it's too late. A common method is using load boards, which are platforms that connect shippers with carriers to facilitate the transportation of goods.

Attackers may impersonate legitimate industry entities such as motor carriers or logistics brokers in a shipping misdirection scheme. In these scenarios, they gain unauthorized access to targeted shipments. Once they have obtained shipment direction, they redirect the cargo using legitimate channels, often involving actual drivers who may be unaware of the criminal activity.

According to the report, these schemes have caused an increase in theft by over 700% YoY. States like California and Illinois have witnessed the most significant increase in organized crime groups. The challenges that are presented in these scenarios are the ability to infiltrate legitimate operations and control innocent workers without their knowledge of the scheme.

Products Most at Risk

Cargo theft groups target a wide variety of shipments, putting most general products at risk of falling victim to cargo theft. However, some product categories tend to see the most theft. Food and beverage freight, including energy drinks and alcoholic beverages, were some of the most targeted in 2023. Smaller freight, including beverages, may be seen as lower risk and high value for thefts. They are easy to move, their value is lower than larger shipments, and they have easy resale potential. It is likely items in these categories are targeted because criminals may feel there will be little effort to track them back down.

In addition to food and beverage, car parts saw a significant increase in theft in 2023. In the post-covid world, the shortage of car parts is no secret. They are in extremely high demand and challenging for individuals to purchase, making them a target for thieves who want to ensure a resell.

Limited Inspection Resources for Theft

With such widespread concern about cargo theft, why do so many incidents continue to occur? The reality is that from just one port alone, 15,000 shipments can go out every single day. The industry simply does not have the resources or laborers to closely inspect every single shipment and direction. Especially since many of these incidents involve real workers, and real scheduled shipments, oftentimes the theft is not noticed until the delivery never makes it to its destination. Shipment demand continues to increase, and the more shipments that go out each day, the harder it is to detect.

Mitigating Cargo Theft Risks

Enhancing the security of cargo is key for companies vulnerable to theft. Identification of risk, proper management of shipments, and mitigation of threats through internal processes and external guidance are key to reducing the overall risk. To enhance operations and protect goods and personnel, it is important to maintain a well-organized warehouse and transportation system. This requires strict security procedures, comprehensive training for all employees, and robust hiring practices. In addition, controlling access to crucial information and maintaining confidentiality of drop-off locations can significantly diminish the risk of fraudulent pick-ups.

Conducting both internal and external security audits helps pinpoint strengths and vulnerabilities in current security practices. Organizations that have experienced high levels of theft may want to consider hiring a consultant to evaluate their current practices and improve security measures.

Equipping cargo warehouses with adequate security measures, including access control systems, surveillance cameras, and well-lit exteriors, is essential. Collaboration with other companies, industry experts, and law enforcement agencies can ensure your organization stays informed about best practices and emerging trends in cargo theft deterrence.

The integration of technology, such as front and rear-facing cameras on trucks, GPS or RFID tracking devices, and high-security seals and locks, has also proven effective in preventing theft or identifying criminals. Educating drivers on recognizing potential threats, maintaining frequent communication, and emphasizing immediate reporting of security concerns are crucial transit security measures. Strategic route planning, minimizing wait times, avoiding leaving loaded trailers unattended, and utilizing tracker apps can all improve overall cargo security efforts.

The Importance of Cargo Insurance in Risk Mitigation

Cargo insurance is key for mitigating the risk of cargo theft for several reasons. It provides a financial safety net and offers coverage for the value of the stolen goods, minimizing the economic impact on the company. With such a stark increase in losses, cargo insurance can be the difference between a thriving organization and financial ruin. Additionally, cargo insurance often requires adherence to strong security measures, which increases vigilance and preventive actions within the company. Insurance providers often conduct risk assessments, which help businesses identify vulnerabilities and implement necessary security enhancements. Lastly, in the unfortunate event of theft, cargo insurance expedites the recovery process, ensuring a quicker return to normal operations and minimizing disruptions to the supply chain.

Cargo Insurance with ECBM

ECBM specializes in the transportation industry and provides comprehensive coverage for various cargo coverage needs. We work with top carriers to ensure your organization is protected in every aspect of your operations. With the risk increasing every year for cargo theft, we can help you ensure your company can thrive, even in the event of a claim. For more information on how we can serve your company, contact one of our agents today.