When trade operator Mary Sandoval recently sent a truck to pick up a load of avocados from a warehouse in Laredo, Texas, she was appalled when the load and tractor-trailer vanished without a trace almost immediately after leaving the facility.
“The truck showed up to the warehouse, gave the warehouse the load pick up number and then drove off and disappeared,” Sandoval said. “We never heard from them, and don’t know where the avocados went.”
Sandoval, whose name has been changed for this story, spoke to FreightWaves on condition of anonymity. It’s the second time Sandoval’s Texas-based logistics brokerage has been the target of strategic cargo thieves over the past year, leaving the company with over $200,000 in damages that they had to pay out of pocket.
“Cargo theft is everywhere, but not enough people are doing anything about it,” Sandoval said. “I spoke to a woman who has a company in McAllen, Texas, that’s had six loads stolen in one year. She said she can’t pay for any of the lost loads and is afraid she’ll have to shut down.”
Cargo thefts surge 68% in fourth-quarter of 2023
Cargo thefts surged 68% year over year (y/y) in the fourth-quarter of 2023 compared with 2022, according to CargoNet, a subsidiary of data analytics firm Verisk. During the third quarter of 2023, cargo thefts were up 57% y/y compared to the same year-ago period.
“The trends tell us that cargo theft is currently at a 10-year high,” Scott Cornell, transportation lead and crime and theft specialist at Travelers, told FreightWaves. “So far, the numbers for the beginning of 2024 are projecting that 2024 will have higher theft numbers than 2023, which had higher numbers than 2022.”
Cornell said they are seeing higher incidences of strategic cargo theft, which involves fraudsters using stolen motor carrier operating authorities or logistics broker identities to obtain freight and misdirect it from the intended receiver in order to steal it.
“Strategic theft is when they use various means to trick you into giving them the freight and that’s through methods like identity theft, fictitious pickups, double brokering scams, those methods are where we’re seeing the biggest increase in cargo thefts over the last 18 months,” Cornell said.
Commodities such as food and beverage goods, electronics and household goods are top targets of thieves.
California, Texas, Florida, Georgia and Kentucky continue to be hotspots for cargo thefts, according to Danny Ramon, an intelligence and response manager at Overhaul, a real-time visibility and risk management platform based in Austin, Texas.
Ramon said members of a cargo theft ring in California were arrested last year, but some escaped law enforcement and set up new crime rings across the country.
“Some of the group’s members escaped and essentially formed splinter cells and have set up shop all over the country,” Ramon said. “They created a network of fraudulent carrier identities across the country that they’re now using for double loading, and gathering intelligence on the shipping and receiving procedures for various well-known distribution centers and origin points to commit strategic thefts and illicit double loading.”
Ramon said in the case of Sandoval’s avocados that were stolen from the Laredo warehouse, the thieves likely sold them locally.
“When we see cargo thefts along the U.S. side of the border, it’s traditionally things that don’t usually travel north of those locations, these are things that can be liquidated easily locally,” Ramon said. “We see a lot of theft of alcoholic beverages in these areas. I used to live in Laredo and there was a theft of a load of window unit air conditioners one time, so the air conditioners would be easy to move locally. Food products are also easy to sell. With avocados especially, I wouldn’t be surprised if some of those other avocados were stolen in the run up to the Super Bowl.”
Protecting trade operators from cargo theft
Sandoval thought there were rules in place from the Federal Motor Carrier Safety Administration (FMCSA) that required workers at warehouses and logistics centers to seek several forms of identification from truckers who show up to pick up loads.
“I thought there was an FMCSA rule that regulates warehouses about asking carriers for identification if they show up to a warehouse, such as getting their driver’s license, license plates,” Sandoval said.
FMCSA officials said there are no specific rules for warehouses or logistics centers requiring them to ask for truck drivers’ information, even if the carrier is supposed to be certified for the Customs Trade Partnership Against Terrorism (CTPAT) program.
CTPAT is a U.S. Customs and Border Protection (CBP) certification that is supposed to mitigate supply chain security risks by offering benefits to participating companies, such as fewer CBP inspections and reduced wait times at ports of entry.
“FMCSA is engaging with impacted consumers (drivers, carriers, and brokers), industry organizations and professionals via conferences, meetings, and correspondence – and we are implementing long-term and short-term measures to address the various types of fraud occurring,” FMCSA said in an email to FreightWaves. “FMCSA is developing a new modernized registration system that will have security and fraud prevention at the forefront, and we are working to implement identity verification services for new and existing applicants.”
FMCSA also said they have taken steps such as implementing multi-factor authentication on IT systems to deter fraud; performing manual intervention checks for the 350 to 400 daily paper requests to certify and validate changes to customer’s driver’s licenses; and implementing more stringent requirements for all new motor carrier registrants to have a physical address that can be verified by the post office.
Cornell said there are some red flags that trade operators can look for when they are unsure if they are dealing with cargo thieves or legitimate operators. Red flags may include recent changes to a motor carrier’s information listings, or whether the carrier’s operating authority was dormant for a long period of time.
“When we work with our clients, we tell them to check for recent changes in the FMCSA contact information, their motor carrier numbers, the address, the phone numbers, the email addresses, names,” Cornell said. “Have there been any recent changes that you might want to revisit with that carrier and go through and make sure that the change is a legitimate change, or whether it’s somebody that bought that motor carrier number with intent to commit cargo theft?”
Ramon said Sandoval and all trade operators should get plugged into the cargo security community, whether it’s with companies like Overhaul or CargoNet, or local cargo security or trade organizations.
“Get plugged into the supply chain security industry, because the theft of loads of avocados is just the tip of the iceberg,” Ramon said. “If [Sandoval] were to harden her supply chain against that particular method of theft, the cargo thieves are just going to target her with the next step in the sophistication ladder, so to speak. There are a dozen different modus operandi with varying sophistication levels between the one that she experienced and the ones that we’re dealing with right now in places like California and Kentucky.”