As SCDigest has reported for many years, cargo thefts of all kinds continue to grow in the US, as organized gangs get more aggressive in their thievery.
That includes thieves breaking into rail cars packed with goods as trains slow or stop approaching a rail station in Los Angeles (which made big new is 2023) to thieves cutting brake lines on rail cars which stops the train, with train staff perhaps a mile or two away from cars at the rear that are being stripped of their contents. (See Despite some Respite in LA, Train and Other Cargo Theft Keeps Rising.)
Supply Chain Digest Says...
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| “Industry experts say brokers, carriers and shippers need to better vet the companies they work with to cut down on fraud,” the Journal says. |
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Another big part of the growth in thefts come from various forms of fraud, generally involving thieves pretending to be real carriers and managing to heist a load.
Logistics security firm CargoNet reported in its most recent quarterly analysis that incidents of freight fraud in the US more than quadrupled in 2023 from the year before. Fraud-related losses were estimated to be at least $500 million last year, according to the Wall Street Journal.
The Journal article tells the story of logistics firm Dedicated Carriers, one of whose staff members last year had subcontracted a full truck shipment using a load board to carrier Sultan Trans.
“Only it wasn’t the Ohio-based logistics company. The swindlers had obtained Sultan’s motor carrier number, a unique identifier for commercial trucking firms, and listed a fake email address on the load board,” the Journal story explains.
That load was a refrigerated container with approximately $50,000 of yogurt and other goods, picked up from a Danone plant near Harrisonburg, Va. That load was supposed to be delivered a Florida grocery distribution center, but the gang had made arrangements with another carrier to deliver the cargo, in a scheme known as “double brokering.”
Soon, Dedicated Carriers started receiving phone calls and emails saying from the thieves warning that they wouldn’t send the load to its original destination unless the company paid a $40,00 ransom.
The Journal explains that with the double brokering ploy, cargo thieves pretend to be carriers, take the money paid to move cargo and then hire another company, unbeknown to the shipper, to complete the task for a lower fee, pocketing the difference.
Alternatively, the crooks might instead steal the cargo outright and sell in on the gray market.
“The schemes can harm parties at every step: Shippers lose merchandise, brokers get swindled and carriers don’t get paid,” the Journal notes.
The rise in thefts has vexed law enforcement, regulators and companies. Victims say that they aren’t getting enough help from law enforcement and the Federal Motor Carrier Safety Administration, the trucking industry’s main regulator. They also criticize operators of load boards, saying that the companies should do more to suspend fraudulent accounts.
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 “Industry experts say brokers, carriers and shippers need to better vet the companies they work with to cut down on fraud,” the Journal says.
Investigating fraud poses a challenge for law enforcement because “the amount of fraud going on greatly exceeds their capacity to chase it all down,” Jeff Hopper, a vice president of Roper Technologies, which operates the largest load board (DAT) the Journal.
And the stolen load of yogurt? A driver contracted to move the load to a location in Pennsylvania suspected issues and called Dedicated Carriers, but delivered the load to the false destination anyway, because that was where the company paying him directed the shipment.
Dedicated Carriers contact Florida’s Hillsborough County Sheriff’s Office because that’s where the load was originally supposed to go. The Sheriff said there wasn’t anything they could do because it was an interstate crime and didn’t originate in the state. Dedicated then called the FBI and was told it needed to file a report with local law enforcement first. The FMCSA told him to file a report on a federal consumer complaint site.
Dedicated later filed a complaint with the FMCSA but hasn’t heard back.
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