Battling Cargo Theft and Fraud

As technological advancements have improved collaboration among brokers, carriers, and shippers, they have also opened new avenues for criminals looking to exploit vulnerabilities in the freight industry.

“Since the COVID pandemic, freight fraud has skyrocketed within the industry,” said Chris Burroughs, CEO of the Transportation Intermediaries Association (TIA).

According to Verisk CargoNet’s 2024 supply chain risk trends analysis, cargo theft incidents in the U.S. and Canada reached record levels, with 3,625 reported cases—a 27% increase from 2023. The estimated average loss per theft rose to $202,364 from $187,895 the previous year. Thieves target different types of cargo based on trends, market value, and opportunity, with recent targets including engine oils, solar energy products, energy drinks, copper materials, high-end electronics, and cryptocurrency mining hardware. Consumables like avocados and nuts, as well as personal care products and supplements, have also seen increased theft.

Major metropolitan areas such as Los Angeles, Dallas-Fort Worth, Atlanta, and New York City have recorded high levels of trailer burglaries and full-trailer theft, according to CargoNet.

“The data suggests a growing and sophisticated threat landscape in cargo theft, with criminal organizations adapting their methods and targets” CargoNet stated, warning that these threats are likely to persist into 2025.

Types of Cargo Theft

Industry groups such as TIA and the Transported Asset Protection Association (TAPA) categorize cargo theft using law enforcement terminology:

-Straight cargo theft: Stolen from unattended trucks at truck stops, parking lots, and other unsecured locations.

-Strategic cargo theft: Involves fraud, such as identity theft, fictitious pickups, account takeovers, double brokering scams, and fraudulent carriers.

-Cyber cargo theft: Uses phishing emails and malware to infiltrate company systems and forge legitimate shipping documents.

-Pilferage theft: Criminals alter bills of lading to steal small amounts of cargo.

Scott Cornell, national practice lead for transportation at Travelers Insurance, highlighted an alarming trend where organized crime groups are purchasing motor carrier (MC) numbers by the hundreds and now by the thousands to commit fraud.

“When these impostors are vetted, they appear completely legitimate,” Cornell said, explaining that fraudsters bid on loads and steal them repeatedly until their MC number is flagged.

Strengthening Security Measures

Load board operators and other industry players are implementing stricter measures to protect against fraud.

“Identifying legitimate participants adds time and complexity to transactions, which can slow things down and increase costs” said Brent Hutto, chief relationship officer at Truckstop.

Immediate action is critical once fraud is detected. Hutto emphasized the importance of reporting incidents to local law enforcement and notifying all involved parties.

“One of the biggest mistakes is when a carrier or broker tries to resolve fraud on their own before informing others” he said.

Truckstop introduced Risk Factors Advanced, a carrier-vetting solution, while DAT Freight & Analytics launched password-less authentication to combat identity theft. “The first place fraudsters attack is credentials” said Brian Gill, DAT’s chief technology officer.

DAT also encourages carriers to work with factoring companies to verify all parties involved in transactions.

New Tools for Verification

Brokers and carriers now have access to enhanced tools to verify each other’s credentials. DAT recommends keeping insurance certificates, MC data, and business addresses updated to build trust.

In December 2024, DAT acquired Trucker Tools, which provides load-tracking and freight-matching services to confirm truck identity and cargo status.

GenLogs, founded in 2023, offers Freight Intelligence, a platform that integrates sensor networks and government partnerships to visually verify truck locations. In February, GenLogs partnered with Highway to improve carrier identity verification, helping brokers and shippers ensure they work with legitimate carriers.

Legal Framework and Future Regulations

While fraud schemes have received significant media attention, traditional cargo theft remains prevalent. The FBI investigates cases meeting federal prosecution thresholds, such as thefts exceeding $5,000 that cross state or international borders. For fraud cases, no minimum threshold applies, and any internet-based fraud is treated as an interstate crime.

The FBI urges freight industry players to use the Federal Motor Carrier Safety Administration (FMCSA) and third-party vetting services to verify company credentials. FMCSA is rolling out multifactor authentication (MFA) for information security, with a modernized registration system expected to enhance industry oversight. New regulations may soon require personal identity documentation and background checks for brokers and carriers entering the market.

“We’re still waiting on implementation timelines,” Burroughs said, “but these changes will help clean up the industry.”

As cargo theft and fraud become more sophisticated, brokers, carriers, and shippers must remain vigilant, adopting advanced security measures and collaborating closely with law enforcement to protect supply chains.