CargoNet Sees a 57% Increase in Supply Chain Thefts

Verisk’s CargoNet Published Q2-2023 Supply Chain Risks Trends

Cargo theft is becoming a rampant problem across the country, according to the latest figures from CargoNet. The national information-sharing initiative between Verisk and the NICB recorded 582 events across the United States and Canada in the second quarter of 2023. This number represents a 57% increase year-over-year, as comparted to the second quarter of 2022.

According to the report, the huge increase stems from ongoing shipment misdirection attacks, a kind of strategic cargo theft in which actors use stolen motor carrier and logistics broker identities to obtain freight and misdirect it from the intended receiver so they could steal it. In total, thieves stole over $44 million in shipments in the second quarter of 2023, wtih the average shipment value per event increased nearly $100,000 to $260,703 per theft as cargo thieves focused on high-value shipments.

Top Three Targeted States Represent 51% of all thefts in Q2-2023

Highlighting specific areas of increased criminal activity, CargoNet reported that theft of a loaded conveyance, such as a full trailer, saw an increase in thefts of 17% year-over-year. Areas most affected by this type of theft included California, Texas, Florida, and Illinois. Regional activity around both New York City and Philadelphia also was significant, however.

In comparison, CargoNet noted that burglary of a loaded conveyance decreased slightly year-over-year due to the impact of recent law enforcement activity, but still remains a significant threat to shipments especially high-value shipments that are traveling on the I-40 corridor through Arizona, California, and New Mexico.

Conversion schemes by organized crime groups also growing

Significant growth in extortion and theft by conversion schemes, particularly from organized groups in Illinois and California was included in the quarterly report. These groups focus on obtaining shipments from logistics brokers, tacking on extra and often exorbitant fees for various manufactured reasons like overweight tickets or previous rate penalties charged to non-affiliated motor carriers.

A major issue in preventing this crime, cautions CargoNet is that criminal enforcement for such cases is complex and rare, effectively emboldening organized groups.

Fictitious pick-ups also a growing problem

Another area of concern outlined in the quarterly report concerned fictitious pick-ups. 127 more fictitious pickups were recorded for Q2-2023 as compared to Q2-2022. While fictitious pickups were most common in the Los Angeles Metro Area, CargoNet acknowledge that this type of theft was occurring all over the continental United States. Some counties recorded a significant problem due to their local industry like Maricopa County, AZ, Travis County, TX, Chambers County, TX, and DeKalb County, GA.

Fictitious pickup groups stole shipments from 39 different product categories in the second quarter of 2023, but primarily focused their efforts on a smaller grouping of freight. This includes alcoholic beverages, non-alcoholic beverages, specifically soda and energy drinks, solar power energy generation equipment, and various kinds of automobile supplies including auto parts, fluids, oils, and tires.

According to CargoNet, fictitious cargo pickup relies heavily on subcontracting the shipment to a legitimate motor carrier and having the shipment misdirected to another address. Logistics brokers and shippers can help prevent fictitious cargo pickups by verifying any bids on shipments with the motor carrier through their contact information on file with the FMCSA and verifying the name of the motor carrier and driver matches who the shipment was tendered to. Motor carriers should be wary of new customers that want them to haul a blind shipment delivering to an address different from the bill of lading, especially if the address is a public warehouse or cross dock in California.

More about CargoNet

In 2009, ISO and the National Insurance Crime Bureau (NICB) collaborated to create a national information-sharing system to combat cargo theft. They designed a system that enables more efficient, accurate, and timely sharing of cargo theft information among theft victims, their insurers, and law enforcement.

For the first time, a nationally coordinated data-sharing system takes into account the needs of insurers, law enforcement, transportation companies, manufacturers, retailers, and their many agents and service providers. The core of the network is a new database called CargoNet. The program focuses on aggregating and sharing information and intelligence from multiple task forces, other police agencies, and the industry.

CargoNet uses case management and analytic functions that enhance the effectiveness of cargo theft task forces. The network also encompasses training and investigative support for law enforcement, as well as theft prevention services and analytics.