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Strategic cargo theft, also called theft by deception or theft by fraud, is a significant phenomenon plaguing shippers. Unlike straight theft, this type of crime involves careful and complex strategizing in order to steal a load. Unfortunately, many in the industry remain unaware of how strategic theft works and why it’s such an issue. Worse, those who have heard of the term often think that it’s limited to fictitious pickups, when in truth, that’s only the horrifying start.
What is strategic cargo theft?
Alongside pilferage, strategic theft is the fastest growing modus operandi (MO) of cargo theft across the United States. It also has the highest impact financially. Typically, strategic cargo theft involves the manipulation of shipment activity from a distance. This can take the form of falsifying documents, pretending to be legitimate motor carriers, or even infiltrating logistics operations.
Cargo thieves who pull off these thefts are often highly skilled and informed about the supply chain industry. Usually, they also work in organized teams where the members have set roles and responsibilities. In short, they’re not so different in structure from a Fortune 500 company. However, the goal of these organizations is decidedly more nefarious.
What are fictitious pickups?
Like other types of strategic theft, fictitious pickup involves the use of social engineering and inside information in order to steal cargo. To pull off this theft, a fake driver will arrive at a shipment and claim to be from that company’s assigned carrier. Their identity will go unchallenged, and they’ll easily drive away with the load.
Fictitious pickup cargo thefts often catch companies unaware for the simple reason that they don’t know to expect them. And even in cases where they are aware of this brand of crime, they’re usually unprepared for other forms of strategic theft.
Other forms of strategic cargo theft
Although fictitious pickups are still an issue in many places, other forms of sophisticated theft have largely overtaken them. While not a full list, these include double brokering, transloading, and BOL altering.
Double brokering scams
Double brokering begins when a criminal obtains the rights to a shipment, often via carrier identity theft. They will then pretend to be the broker they just obtained the shipment from (or some other broker). Next, they will “re-broker” the shipment to a legitimate carrier, who has no idea what’s happening. In turn, this carrier will raise less suspicion at pickup, since they’re unaware that anything illegal is at hand.
Transloading/shell game
Transloading occurs when freight is moved into a different trailer or container, at which point a new Bill of Lading (BOL) is created. This (fraudulent) BOL will disguise details of the shipment while also legitimizing the thief as the designated carrier. In effect, this enables the thief to “launder” the stolen freight, which makes it much harder to detect and return the load.
BOL altering
“BOL altering” happens when a BOL is scanned and altered to reflect a new piece count, weight, and seal. These new recordings will align with what remains in the trailer after the thieves have stolen from it. At delivery, the shorted load is counted as complete, since it matches the altered paperwork. It usually takes weeks or months for a company to realize what’s happened.
How to prevent fictitious pickups and other forms of strategic cargo theft
Unfortunately, fictitious pickups are only the start when it comes to strategic thefts. Worse, criminals are constantly changing their tactics, meaning that preparing against only one type of theft is never enough. However, there are a few strategies and tools you can implement to work against strategic theft in all its forms.
- Check the carrier’s official website and confirm their information before making any phone calls or sending emails. That way, you’ll know for certain that you’re speaking with a legitimate company.
- Validate your drivers at both pick up and delivery. This means checking their driver’s license has the information you’re expecting and that their truck’s plates match what’s registered.
- Educate your employees on how to identify and stop thefts. Implement regular training and specific reporting protocols and make sure to communicate both effectively.
- Use tamper-evident seals and locks or only work with companies who employ them. It’s also important that all shipments utilize 24/7 visibility and risk management tools.
Overhaul’s holistic approach to risk
From food and beverage companies to pharma LSPs and freight brokers, no product or business is immune from strategic theft. This is why supply chains must take adequate security measures to prevent cargo theft and more generally protect their shipments.
Overhaul’s real time visibility SaaS solution helps you keep track of your sensitive, high-value cargo whenever, wherever. With the help of our risk management tools, you’ll be able to identify threats and stop them before they spiral into problems. For worst case scenarios, we also work with law enforcement to aid in cargo theft recoveries. And thanks to our global intelligence leaders, you’ll have the latest insights regarding new and developing risks.
Read our white paper to learn more about strategic cargo theft and how Overhaul keeps shipments protected.
