If you run a warehouse or distribution center or work in the logistics industry, freight theft deserves close attention. Crime rates are known to spike for over-the-road transportation during the holidays and busy periods, having a significant impact on businesses and consumers.
According to the FBI, cargo theft is costing shippers and trucking companies up to $30 billion annually. On a business level, warehouses aren’t receiving the materials they need for operations, and customers aren’t getting the products they want and need. Here’s what you need to know about the uptick in distribution theft, how it is happening, and some ways to prevent it.
Freight Transportation Theft Reaches a 10-Year High
Freight and cargo theft is a serious and ongoing problem for U.S. businesses. According to Scott Cornell, crime and theft specialist at Travelers, these incidents are at a 10-year high. In January 2023, theft was up 61% year-over-year, and that figure had jumped to 82% year-over-year by March.
CargoNet, a cargo security network, recorded 582 thefts across Canada and the U.S. in just the second quarter of this year. The value of those shipments was over $44 billion, with a loss per theft ranging as high as $260,000. Thieves are becoming increasingly sophisticated with their tactics, requiring businesses to create proactive measures to safeguard shipments.
Different Types of Freight Transportation Theft
Supply chains are becoming known for being more efficient, even with many moving parts working together. Unfortunately, there are still vulnerabilities throughout the supply chain targeted by criminals. Items like food and beverage products, electronics, and alcohol and tobacco are prime targets for freight and distribution theft. Here are some of the main ways these thefts occur.
Also known as “leakage,” this common type of theft involves criminals taking small amounts of goods out of shipments so businesses don’t notice anything is missing. Over time, the losses can be substantial. And once a criminal realizes a business is an easy target, the activity won’t stop.
2. Straight Cargo Theft
This type of cargo theft involves stealing an entire shipment from a location where it is stilling or being stored. Examples include parking lots, loading docks, truck stops, or any other place the cargo might be left unattended.
3. Strategic Cargo Theft
This type of cargo theft is one of the biggest issues facing supply chain theft today. It involves using deceptive means to trick brokers, carriers, or shippers to hand over a load to a thief instead of a legitimate business. Thieves will impersonate legitimate shippers and brokers and even offer deals that companies are quick to snap up.
4. Coerced Stops and Hijackings
While less common, highway robberies still happen in several ways. A thief might follow a truck leaving the warehouse, waiting for it to stop for a break so they can hijack the shipment. Or someone might falsely warn of an emergency with the truck and steal it once the driver pulls over.
Ways to Prevent Freight and Distribution Theft
A lot of freight theft involves the manipulation of information and the use of technology. No matter how it happens, here are some of the top ways you can prevent the loss of your products and other valuable materials.
1. Remain Vigilant
Sham carriers and brokers often impersonate legitimate companies. They are good at what they do, making it easy to become victims of their crimes. Even when a phone number or email address looks like someone you’ve worked with in the past, it’s important to use extra scrutiny before replying. Paying close attention to details like phone numbers, email addresses, business names, and even logos can help avoid some common scams.
2. Follow Strict Security Practices
Many modern freight scams can be prevented by following strict security protocols. Because so many thefts involve the use of technology, it’s important that businesses:
- Change passwords frequently
- Keep passwords private
- Avoid clicking links from unknown senders
- Avoiding replying to unsolicited messages
3. Only Use Known Providers
If you have a strong relationship with a broker or carrier you trust, continue to build those business ties. At the same time, you should track every truck that enters and leaves your facility by nothing things like license plate, USDOT number, bill of lading, and driver info. In many cases, you can use technology to record some of the information automatically.
4. Thoroughly Vet New Offers
Before you do business with a new provider, make sure you know who they are by doing thorough research. Conduct your research into the following before you provide any outside company with non-public data about your operations:
- Check references — Any provider you work with should be able to provide references. You can also check with your professional network to vet the company.
- Use data sites — You can learn more about companies through a variety of sources like Gohighway, Carrier411, and the Federal Motor Carrier Safety Administration (FMCSA).
- Evaluate the offer — Consider any partnership offers carefully. It will be a glaring red flag if something sounds too good to be true. While you can expect variance to some degree, if a business promises to severely undercut competitors, it may be a scam.
5. Report Distribution Theft Promptly
Thieves will strike again if they aren’t stopped. If cargo does happen, take immediate action. Contact the police and notify all parties involved. Also, let your insurance company know about the theft since they may have access to resources to help with recovery and prevention.
With freight theft reaching new heights, industry professionals are taking extra precautions to protect themselves and continue to provide high-quality service to customers.
Shipping materials from one point to another has always involved some risks. But, now more than ever, these events are costing businesses a significant amount of money. Fortunately, you can follow some proactive steps to secure your shipments and protect your overall business results.