Inside the $455M Cargo Theft Surge – 4 Ways to Protect Your Fleet

Cargo theft reached an all-time high in 2024 – up 26% from 2023, with total reported losses of $455 million. The average estimated value per theft rose 7.7% to $202,364.

Increasingly, these thefts result from a growing tactic known as strategic cargo theft – a method in which criminals use stolen identities of motor carriers and logistics brokers to misdirect and steal freight. This theft has surged nationwide, particularly in hotspots like California, Georgia, Illinois, Tennessee, and Texas, with incidents rising by a staggering 430% year over year.

CNBC conducted a six-month investigation into the crime, uncovering how increasingly sophisticated cargo theft rings are targeting America's supply chain to steal entire truckloads carrying consumer goods, food, beverages, and electronics with near impunity. Fleet owners and operators should take proactive measures to safeguard cargo before a loss and be prepared to act quickly if a theft occurs.

Top Tactics for Strategic Cargo Theft

Diligence is essential to protect cargo from increasingly sophisticated heists, which can manifest in different ways – from phishing and online scams to full-blown identity theft. Understanding common cargo theft tactics will help drivers, carriers, and shippers implement effective risk management strategies to reduce the likelihood of loss. 

One common tactic involves perpetrators impersonating a freight broker or carrier to secure a shipment from a customer. They then arrange for an unsuspecting driver or carrier to transport and deliver the freight. The thieves often use industry-specific jargon, instruct drivers not to disclose delivery details to the shipper, and may even tender cash upon delivery to add a layer of legitimacy.

Once the legitimate carrier has picked up the load, the thieves attempt to redirect it to a warehouse for quick transloading and product movement. When the shipment fails to arrive at its destination, the customer investigates only to discover they might have contracted with a fraudulent broker or carrier. The innocent driver, who unknowingly followed false instructions, is often left bearing the blame and gets penalized.

In other cases, thieves will create a fake brokerage to secure load contracts, then hire a third-party carrier to transport the shipment. After receiving payment from the customer, they disappear, leaving the actual carrier unpaid.

Additional forms of strategic cargo theft include double brokering and consignee impersonation. In double brokering, a broker contracts a legitimate carrier to transport freight but secretly rebrokers the load to another party without the shipper’s consent, keeping the payment and leaving the actual carrier uncompensated. In consignee impersonation, scammers use phishing and cyberattacks to alter recipient details and intercept shipments in transit. 

Effective Strategies for Strategic Cargo Theft Prevention

Shielding your digital data from malicious actors is imperative to prevent cargo theft. Here are four best practices to help reduce your risk:

1.    Safeguard and Verify your Information

Leverage your own experiences and insights from colleagues and professional networks as proactive defenses against cargo scams. For example, if an unfamiliar person claims to represent one of your shippers, brokers, or carriers, verify their identity with a trusted contact before moving forward.

Pay close attention to details like email addresses, phone numbers, physical addresses, logos, and names. Even minor discrepancies can signal a scam – and lead to substantial losses.

As a shipper or receiver, it's essential to track every incoming and outgoing truck. Document the motor carrier number, driver’s license, bill of lading, carrier name, and more. Whenever possible, use video surveillance or take photos to maintain records.

While this level of scrutiny requires effort, it significantly deters bad actors targeting your valuable cargo.

2.    Screen New Partnerships

Like with personal relationships, ongoing security relies on working with trusted partners. Longstanding relationships with vetted carriers and brokers ensure that your interests are understood and prioritized.

When evaluating new partners, perform thorough due diligence. Use references, professional networks, and tools like the Federal Motor Carrier Safety Administration (FMCSA) and Carrier411 to vet providers and protect your operation.

3.    Maintain a Healthy Level of Skepticism

Stay cautious when reviewing offers from carriers, brokers, or shippers. If something seems too good to be true, it probably is.

While pricing can vary, trucking costs – like fuel, vehicle maintenance, and driver pay – are generally stable. Be skeptical of unusually low rates or overly generous pay, and investigate the reasoning behind such offers before committing.

4.    Ensure Information Security Protocols are in Place

• Although fundamental, these cybersecurity best practices remain essential in the fight against modern scams, including cargo theft:
• Keep passwords confidential. Share them only with trusted individuals, update them regularly, and close unused accounts.
• Avoid clicking on links from unknown sources. Encourage employees to hover over hyperlinks and check the browser status bar before clicking.
• Do not respond to unsolicited emails, especially those impersonating legitimate companies.

Traditional Cargo Theft Trends and Best Practices

While strategic cargo theft has surged in recent years, traditional cargo theft remains prevalent. In 2024, 46% of all cargo theft occurred in California, Texas, and Illinois. The most targeted locations were warehouse/distribution centers and truck stops, with top commodities including food, beverages, and consumer household goods.

Best practices for drivers and carriers to reduce the risk include:

• Include cargo security in your pre-trip inspection.
• Be strategic with parking: back trailers against buildings, fences, or other trailers; park in well-lit, high-traffic areas; and look for surveillance cameras.
• Do not discuss your load or route with anyone who doesn’t need to know.
• If you suspect you're being followed, slow down and let the vehicle pass. If that fails, exit at a safe location. Contact law enforcement if suspicion remains.
• Try to drive several hours after pick-up before making any stops, reducing the chance of being targeted.
• Use theft-deterrent devices to secure and track your freight.
• If the vehicle must be left unattended, lock it, take the keys, and return quickly.
• Upon return, scan the area for suspicious people or vehicles and adjust accordingly.
• Follow all company policies and procedures related to cargo security.

Should a theft occur, promptly file a report with law enforcement, notify all relevant stakeholders, and collaborate with your broker or insurer to initiate the claims process. By following these protocols, you can effectively address and mitigate the impacts of cargo theft.

IAT Insurance Vendor Partnerships to Prevent Cargo Theft

IAT Insurance has added two new partners to its Loss Control vendor list, offering cargo theft prevention products at preferred pricing for IAT policyholders:

• Enforcer Locks: Offering a range of heavy-duty security products, including padlocks, trailer door bar locks, air cuff locks, and trailer kingpin locks.
• 7P Solutions: Specializing in covert GPS cargo tracking and trailer geo-fencing technology.

For more information, please contact the IAT Insurance Loss Control department.  

ASK A LOSS CONTROL REPRESENTATIVE

Have a question on how to mitigate risk? Email losscontroldirect@iatinsurance.com

INTERESTED IN LEARNING MORE?

IAT Loss Control Specialist Jared Fritts and SVP of Commercial Truck Pete Matthews talk more about strategic cargo theft on IAT’s podcast, What’s Brewing. Tune in here.