Cargo theft trends, prevention strategies for 2025

Jason Cannon:

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Matt Cole:

What are the cargo theft trends coming into 2025 and what can fleets do about it?

Jason Cannon:

You're watching CCJs 10 44, a weekly episode that brings you the latest trucking industry news and updates from the editors of CCJ. Don't forget to subscribe and hit the bell for notifications so you'll never miss an installment of 10 44. Hey everybody, welcome back. I'm Jason Cannon and my co-host is Matt Cole. Cargo theft has been a major issue for trucking and logistics for a number of years, but since the height of the covid pandemic theft activity has skyrocketed all around the country,

Matt Cole:

A lot of that increased activity goes hand in hand with the increase in freight fraud seen throughout the industry. Cargo theft has grown to be much more than just the physical theft of trucks, trailers and freight, but just how bad has cargo theft become

Danny Ramon:

The state of cargo theft right now is bad to put a little bullet point on it, but if you want a little summary of what's been happening, I mean, we've been seeing increases on increases, right? Not just continued increase but acceleration. We're hoping at this point that we may start to see a leveling off, but that leveling off it is in no way due to capacity constraints on the criminal side is just due to very likely we've reached a saturation of interested parties who are interested in getting organized around cargo theft, right? But we've seen increases on all metrics of cargo theft in the US and Canada, whether it's across a certain product type vertical. They've all seen increases, whether it's in certain states, they've pretty much all seen increases. They may jockey for position when we're talking about percentage and share of thefts, but outside of California being number one, but by and large, they've all seen increases in theft. And then when we talk about types of theft, how these thefts are performed, we're seeing massive increases in large scale PIL fridge, which can include the entire contents of the trailer. PIL fridge really just means taking the cargo out of the trailer rather than taking the trailer with it. And strategic theft or fraudulent pickup goes by several different names, but fraudulent or deceptive theft is one of the things where we're seeing the most gains, the most sophistication and the most targeting. So I think that's the one right now that's doing the most damage.

Jason Cannon:

Cargo theft by way of deception or fraud has grown so much that Danny says it's nearly outpacing traditional theft of physical assets

Danny Ramon:

Because the scalability of that type of theft is just not the same as it is with a fraudulent or deceptive type of theft where you're using technology, right? A straight theft, which is the traditional theft where the entire tractor trailer or at least the trailer is stolen from the rightful driver whenever it's unattended usually is still seeing increases as well. But that type of theft, like I mentioned, it's going to take a team of people, usually three to five people upwards of a week or more, especially if you're counting intelligence gathering on their end, it's going to take at least a week or more to capture one trailer to steal one trailer of product. Whereas if you know what you're doing, if you've got a couple of industry contacts on the bad actor side, you can steal dozens of loads in a day from behind the safety of a keyboard where no one's ever going to see you, you're never going to come into physical contact with a stolen product and with the proliferation of e-commerce, you can drop ship that to an e-commerce warehouse where it just gets taken into inventory shipped out as it's ordered and you're collecting a hundred percent of that profit.

You didn't pay for that product. A hundred percent of what you're charging and receiving is then profit margin.

Matt Cole:

Bad actors are using a number of different fraud strategies to steal cargo. Danny explains what some of those are. After a word from 10 44 sponsor Chevron lubricants,

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Danny Ramon:

So early on, the industry widely referred to this genre of theft as fictitious pickup, and that's because when we first started to see this type of theft in the industry, and we're talking 10, 12, 15 years ago, fictitious pickup was what was being experienced by and large, and that's very much a social engineering type of theft where somebody has some insight information about A, B, C trucking is supposed to pick up this load at four o'clock on a Friday. Well, you know what? We're going to show up at two o'clock on Friday pretending to be a BC trucking and saying, Hey, we're just trying to get out of here before rush hour. Help me out. And people would often help them out, and something like that would often gain them, ideally a weekend's worth of lead time, but even if they only got a few hours worth of lead time, that was all they needed.

Now, we've had to broaden the category to strategic theft or theft by deception, theft by fraud because of the highly varied methods that they use, and they will stack switch and stack and mix and match these different MOS based on the target that they're pursuing because they're intimately familiar with all of these logistics operations. They're familiar with the processes and procedures that the origins that they're targeting. They're familiar with the processes and procedures with the destinations if the destination is going to be involved in their scheme, but some of those schemes can involve falsifying paperwork. The bill of lading, which ends up then being the proof of delivery technology has advanced to the point now where you can scan and edit a PDF on your phone, and then you send it to somebody, have it printed out, and you've got a new bill of lading for that truck, and producing a new bill of lading for a trailer full of goods is essentially laundering that freight because you can mask the original origin, you can mask the intended destination, you can change piece counts and weights and seal numbers on there.

So maybe if a destination doesn't have processes in place to check digital bools or blockchain enabled bools from the shipper, they're going to take the piece of paper that the driver hands them, and that's gospel to them. If that piece of paper says there's supposed to be two pallets on this 53 foot trailer, that's standard practice in some parts of the supply chain, right? So they'll open up a 53 foot trailer and say two pallets. Cool. That's what we're supposed to see, and everything's fine as far as they're concerned when that was actually supposed to be a full trailer with 20 plus 40 plus pallets on there.

Jason Cannon:

With FMCSA already working to revamp the registration system, how much of an impact will those changes make?

Danny Ramon:

It's absolutely going to make a difference in that. They're going to close some of the low hanging fruit loopholes as it is for these criminals that these criminals are able to exploit. But what it's going to do, and by the time these measures are implemented, these criminals will have moved on to bigger and better tactics. They will have come up with more sophisticated schemes, but that does not mean that we should not take these steps that the F-M-C-S-A is going to take these steps that they're going to take hopefully, including transparency towards the private sector. When we're looking to vet carriers, we need a lot more transparency into the data that the F-M-C-S-A has in order to be able to do that effectively. If they do that, if they're able to give us those tools, I think that could actually make a really big difference in the supply chain security landscape

Matt Cole:

For fleets. The type of freight being hauled can definitely have an impact on the risk of being targeted by thieves, but the targeted products may not be what you would expect.

Danny Ramon:

It absolutely does because these thieves are after certain products, but what doesn't matter the way it used to is exactly what products they're pursuing because it's not necessarily about a cost dense product the way it was five, 10 years ago. Now it's about what they can get it for. It is more about demand for that product. How quickly can they liquidate it? Because as I mentioned, it used to be if you were performing straight theft, stealing an entire 53 foot trailer of like product, chances are you're operating within a criminal network where one of the layers in that network is a fence. So that fence is then going to liquidate that entire load all at once, which when you do things like that, you're not getting anywhere near retail or even wholesale value for that as a thief, right? As a thief, you hope you can get maybe 10 or 15% if you're lucky.

Now, if you look at the way things are going now, like I mentioned with e-commerce sites and the ability to just ship overseas in bulk to legitimate buyers over there, buyers who think that they're buying legitimate goods is increasing the profit margin. So all of a sudden, it's not necessarily how cost dense the product is, it's how in demand it is, how quickly it can be moved because the thief is going to get a much higher margin for it. I mean, a great example of this is you look at 2020 when all of a sudden we had dozens of truckloads of paper towels and toilet paper being stolen, not at all cost dense, but in demand,

Jason Cannon:

As Danny mentioned earlier, the cargo theft market, so to speak, is likely near its saturation point, but he and overhaul expect a growth in the sophistication of thieves and their tactics as 2025 moves along.

Danny Ramon:

We're hoping the criminal networks that are already involved have kind of reached their capacity right Now. That doesn't mean that there's not more capacity for more criminals to get involved, and I believe that there is capacity for that, and I believe we're going to see that how extensive it's going to be, how quickly it's going to happen. I don't know. But what I do know is that we're going to see an increase in a development in the sophistication in the techniques that these criminals are using for theft by fraud and theft by deception. They're going to come up with new tactics. A lot of it I have a feeling is going to involve falsifying paperwork, forging paperwork, doctoring paperwork, because there's a lot of things that can be done around that that can throw people off the scent when you're investigating or when you're trying to prevent a theft.

Matt Cole:

So what can the trucking and logistics industries do to cut down on theft?

Danny Ramon:

There is no silver bullet. There's no one thing that's going to fix everybody's problem. I really wish there was. It would make my job a lot easier, but it comes down to maintaining your carrier relationships, updating records, and making sure you've got a verified point of contact within each of those carriers. And then beyond that, you really having a culture of security at the loading dock, making sure that everybody's being vetted properly when they come in. Is this the driver that we were supposed to receive? Is all the signage correct? Are there any red flags? Is the license plate zip tied onto the grill at chest height indicating that maybe it's changed three or four times a day? Is that coupled also with a magnetic placard on the side of the tractor indicating that that also might be switched out three or four times a day?

Look at the trailer. Does it look like it's had markings spray painted over and new markings put on top of it? Look and see if the bolts on the back of the trailer have been replaced, or if the rivets have been replaced with nuts and bolts, because that means that they can open it without tampering with the seal. There's all sorts of things you can look at, but it comes down to making sure you're giving your freight to who you think you're giving your freight to. Beyond that, the only thing that can help you is going to be real time visibility. You need granular visibility into your supply chain to be able to identify patterns of theft or patterns of behavior that indicate theft or fraud while you still have the opportunity to recover it.

Jason Cannon:

For carriers and drivers specifically, one best practice has always been to make sure that the driver can get at least 250 miles from the pickup location before stopping for fuel or rest, but is that still the case in this new age of cargo theft?

Danny Ramon:

It is absolutely still considered best practice. That is still when straight theft is practiced, it is most often practiced by being followed from origin until it stops and is left unattended, and if it doesn't happen within a certain amount of time, there's a fair chance those thieves are going to turn around and go back and try and find some more low hanging fruit. That being said, situational awareness is key because it differs where you are and what you're hauling. For example, coming out of California, you hit 200 or two 50 miles, right? As you cross a state line into Arizona, we've seen a massive explosion in thefts in Arizona, specifically for trucks that are leaving the LA base and the Inland Empire area because for several decades at this point, there's been a massive price difference between California and Arizona, which has caused the truck stops just across that border on the Arizona side to have some really fantastic amenities for truckers, which means it's a very desirable destination.

Well, the thieves know this, right? So their networks, what they're doing is they're setting up scouts at the origin sites who will identify targets, communicate the information about these targets to their accomplices, who they have waiting in Lake Havasu or in Kingman, Arizona, where a lot of these high amenity truck stops are, and they're going to pick up the trail there. That in effect, almost creates a new red zone starting at the California, Arizona border. Operationally, we can't realistically ask people to not stop from LA until they get to New Mexico, and even if we did, considering the way these thefts are happening, that would only move the hotspot to New Mexico, eventually we're kicking the can at this point. So really it comes down to there's no magic bullet. It's going to take a security mindset from the top down and the bottom up to make sure that you're freight of secure, coupled with all the layers that you can afford to install on your supply chain, top most being visibility, so you know the location, the condition, the whereabouts of your cargo at any given time.

Jason Cannon:

That's it for this week's 10 44. You can read more on ccj digital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.