Cargo theft is a significant problem in the United States. The FBI estimates losses costing the U.S. billions of dollars annually, although far less is voluntarily reported by companies out of concern for impacts on reputation and insurance premiums. While all types of cargo are at risk, the food and beverage industry has become a top victim of cargo theft in recent years, surpassing even the semiconductor and pharmaceutical industries.
The impact of cargo theft on perishable goods transport
In 2022, CargoNet recorded a 15% increase in supply chain risk events across the United States and Canada, with theft of raw beef, poultry, and pork being particularly impacted. The average value of cargo stolen during reported events, was $214,104, equivalent to an estimated $223 million in cargo across 1,778 reported theft incidents. Real numbers are estimated to be much higher. Fictitious pickups, carrier fraud, and other tactics are commonly used by criminals to steal cargo, with California, Texas, and Florida representing 46% of all theft in 2022.
Tactics used by criminals
Fictitious pickups increased 600% year-over-year (2021-2022), which involve criminals posing as legitimate shippers to pick up cargo from a warehouse or distribution center. Carrier fraud, on the other hand, involves criminals imitating haulers and other sub-contractors using falsified documents. Fraudsters also pose as forwarders using a freight exchange site to provide false instructions to a driver. They match a legitimate hauler to a shipper, facilitate the movement of goods, and direct the driver to deliver the cargo to an alternative address where it is stolen.
The challenges and risks involved
Cargo at rest is cargo at risk, and there are many opportunities for criminals to steal cargo along the supply chain. Supply chain disruptions, port congestion, and railhead delays can cause product to be stuck on ships, highways, or in warehouses, making it easier for criminals to steal cargo. In addition, the labor shortage in warehouses has put a backlog on when product is even accounted for.
Mitigating risks
Companies can implement supply chain visibility solutions, supply chain management, predictive/prescriptive analytics, mobile technology, and systems integration to mitigate risk. Driver training can also be implemented to help drivers understand what to look for and become part of the solution.
Key takeaways
- The food and beverage industry is the top victim of cargo theft.
- Fictitious pickups, carrier fraud, and other tactics are commonly used by criminals to steal cargo.
- Cargo at rest is cargo at risk, creating many opportunities for criminals to steal cargo
- Driver training can help drivers become part of the solution.
Companies can implement various solutions and platforms to mitigate risk. As a supply chain professional, you’re well aware that cargo theft is a persistent threat that can have significant financial and reputational consequences. To mitigate this risk, consider implementing these five strategies:
- Conducting a risk assessment.
- Using data analytics to identify high-risk routes.
- Implementing strict access control policies.
- Utilizing GPS tracking devices.
- Implementing advanced security measures like the Power In-Lock internal locking system.
Tony Dellumo is the marketing manager for the Lanco Group of Companies, parent of QProducts & Services, where this blog originally appeared.
