Wednesday, March 21, 2018

Cargo thieves playing whack-a-mole, making it hard for law enforcement to keep up

Wednesday, February 22, 2017
by DOROTHY COX/The Trucker Staff

Anyone who has played the whack-a-mole game knows it’s not always easy to keep up, which is the way law enforcement often feels about trying to anticipate where cargo thieves will strike next and what kind of cargo will be targeted, says a cargo insurance expert. (©2017 Fotosearch)
Anyone who has played the whack-a-mole game knows it’s not always easy to keep up, which is the way law enforcement often feels about trying to anticipate where cargo thieves will strike next and what kind of cargo will be targeted, says a cargo insurance expert. (©2017 Fotosearch)

Cargo theft is often like the whack-a-mole game: Smack one kind and another pops up somewhere else, making it hard for law enforcement to keep up.

That’s the assessment of Scott Cornell, and he should know. He’s currently transportation group lead and crime and theft specialist with Travelers and directed the insurance company’s cargo theft division for many years. Travelers has a dedicated cargo theft unit, investigating on behalf of clients 24/7.

“Thieves respond to what’s easy to steal and sell: They’re good capitalists,” says Cornell. In 2010, food items were popular to steal because of the economic downturn. Before that it was electronics. Food and beverages are still sought-after by thieves but now, electronics and home and garden items are vying for first place, a new wrinkle, he says.

And as trucking and other industries step up their use of technology to prevent thefts, criminals follow suit.

For example, thieves are using “GPS jammers” to try and thwart load tracking, Cornell says.

Outright or “straight cargo theft,” where thieves steal a loaded trailer or tractor and trailer from a lot or truck stop, is still the most prevalent. But Cornell says thieves are fast increasing their “strategic cargo theft,” where fictitious pickup (the good guys are doing their job delivering freight but a thief arrives early pretending to be legit and takes the load); identity theft (the carrier or broker unknowingly is dealing with a thief or thieves), use of “Trojan [computer] viruses,” and other types of computer hacking are being used. One reason undoubtedly, say experts, is the use of Web-based brokering. Hackers can get into a computer system and pose as legit customers or even set up a nonexistent company to do their criminal business. They have also been known to hack into telephone conversations to find out where a load is going.

These types of thefts are normally carried out by organized rings or gangs, Cornell notes. Travelers’ investigative unit has a “sting” trailer with tracking devices, hidden microphones and hidden cameras to trap criminals.

With autonomous trucks looming in the near future, what’s the possibility of thieves hacking into a truck’s computer to steal its load?

“It’s a big topic,” says Cornell, a board member of the Transportation Asset Protection Association, but he says group members “aren’t sure we will see it” because an autonomous truck would be almost constantly moving. It’s sitting cargo that’s the danger. “You’d have to go to great lengths to redirect the truck and steal the cargo,” he says.

Often, thieves strike from inside.

Cornell gave this example of a scam: The thief sends an e-mail to someone in a company who doesn’t handle payroll that says: “We owe you money; how to we pay you?” That person sends the e-mail to the right person in payroll. They open it along with its attachment and it looks legitimate. Now the company has the above-mentioned “Trojan virus” infecting their computer system and giving thieves access to what they want.

“With a few [key] strokes they can see your orders, who you do business with so they can conduct identity theft,” Cornell says.

Or there may be someone posing as being from a legit company with a legitimate-looking truck who picks up a load and disappears, as in fictitious pickup. There’s also double brokering, he says, where a bad guy re-brokers the load and the customer has no idea the load has been picked up by thieves. In short, “You’re not doing business with a real company.”

However, law enforcement has been concentrating on identity theft and other types of strategic theft and doing such a good job at it, that there has been a resurgence of straight cargo theft, says Cornell. In fact, FreightWatch reports that in the third quarter of 2016 “fictitious pickups saw its theft rate fall by 65 percent” from the second quarter and the average value of thefts fall by 84 percent.

It’s the “whackable” concept again, he says, where thieves “shift, move, bob and weave around what the industry and law enforcement are doing to reduce it.”

Lower tech crimes can certainly rack up large losses. Such was the case this past December where two men were sentenced for their roles in a shipping theft scheme that defrauded FedEx and wireless carriers Verizon and AT&T of more than $1.8 million, the FBI reports.

Christopher T. Crawford, of Memphis, Tennessee, an employee who was with FedEx during part of the scheme’s duration, used fraudulent FedEx corporate shipping accounts to print labels which were used to “over-label” boxes of wireless devices. The boxes were then diverted to Jordan West and “unknown co-conspirators” in New York City and other areas. Each box contained thousands of dollars’ worth of Verizon and AT&T mobile devices which were sold to third parties.

Cornell advises carriers, brokers and shippers to take a “layered approach” to protecting cargo. Use technology, yes, such as geo-fencing, route fencing and covert tracking devices etc. but don’t depend on technology alone. Also use good rear door locks; air cuff locks; light sensors that come on if the door is opened etc. and follow the adage, “Cargo at rest is cargo at risk.” And drivers should keep track of their important credentials at all times, never leaving them unattended and vulnerable to thieves.

Of utmost importance is educating employees, drivers, maintenance technicians, back office employees and all involved with freight on the importance of being constantly aware. Check and re-check a trucker’s CDL, credentials and identity — by phone if necessary — and make sure that paperwork matches up. The same goes for brokers and shippers you’re dealing with: Be sure they’re who they say they are.

Although some sources report that cargo theft is a $30-billion-a-year crime or more, like the whack-a-mole concept, that’s hard to pin down because according to Cornell, there’s not a consistent and uniform way of reporting cargo theft.

“Most data and information is available from voluntary reporting, he says, “so it’s a small sample like with political polls [but] this is what the numbers can tell us.”

What do the third-quarter 2016 numbers say?

The good news was that FreightWatch’s CargoNet Command Center reports cargo theft incidents in the U.S. and Canada dropped 9 percent compared with third-quarter 2015.

The bad news? Theft of full truckload continued in third-quarter 2016 as “the most prevalent method of theft,” accounting for 78 percent of all reported thefts with an average loss value of $120,298. Theft from facilities for the same period saw a 98 percent increase and a 226 percent increase in value, accounting for 5 percent of total thefts.

Good-ish news was that a total of $23.7 million in cargo was stolen in third-quarter 2016, but that was down $8.2 million from third-quarter 2015. The average cargo theft was worth $118,000 in third-quarter 2016 compared with $144,000 for the same period of 2015.

But in California, CargoNet reported a 40 percent increase in cargo thefts year-over-year. More explicitly, cargo theft in Los Angeles County decreased 13 percent year-over-year but theft in San Bernardino County increased 229 percent year-over-year, most of it in Ontario and Fontana, California.

It’s the whack-a-mole concept again.

Overall, electronics were the costliest commodity loss but that dropped from $14.5 million in third-quarter 2015 to $7.8 million in third-quarter 2016. Household items were the second-costliest loss at $4.6 million, and increased 138 percent year-over-year.

Warehouse locations were the most common location for cargo theft but theft at secured yards increased 100 percent year-over-year, making it the second-most common theft location. Theft from secured yards in Texas, Florida and Illinois also increased. Unsecured yards came in as the third most-common theft location and increased 134 percent year-over-year.

However, unsecured parking was the most popular location for “large-scale cargo thefts,” accounting for 75 percent of incidents in which a location type was stated, FreightWatch reported.

After California, which had 38 percent of total cargo thefts, Texas was second with 16 percent; Florida had 8 percent; Illinois had 7 percent; Tennessee accounted for 6 percent and Georgia came in with 3 percent. 8



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