CARGO THEFT AND FRAUD REPORT: 2023 UPDATE
Cargo theft is a major threat to supply chains. It hits road transport – and drivers – especially hard, as goods are particularly vulnerable to theft while in transit. From food and beverages to high-end electronics, cargo thieves continue to target commodities that can be sold easily on the black market. Food is at an ever growing risk of theft, as criminals seek ‘low risk, high reward’ targets and retailers and manufacturers are playing into their hands. Opportunistic thieves can make almost all goods fair game. Knowing emerging tactics and trends can help your business recognise the vulnerabilities and prevent fraudulent activity within your supply chain.
2023 REPORT: OVERVIEW
Global supply chain intelligence provide BSI, logistics and transport mutual insurer TT Club, and the Transported Asset Protection Association (TAPA) EMEA have released their annual report on cargo theft risks and activity.
The 2022 report found that the industry continued to face significant security, continuity, and resiliency threats due to the Covid-19 pandemic, and although its impact seemed to lessen in the early stages of 2022, it had caused disruptions and major delays throughout 2021, and still had massive residual impacts globally. Many of the concerns BSI, TT Club, and TAPA EMEA monitored throughout 2021 set the tone for continued risk to supply chain security in 2022. Simultaneously, new challenges and risks were likely to play a large role, such as the ongoing conflict in Ukraine, which was disrupting many industries on the short-term, and could have a variety of long-term effects.
The 2023 report indicates that thefts from hijacking fell as a proportion of cargo theft from 24.4% to 17.0% in 2022. Theft from facilities now accounts for more than a quarter of total thefts, increasing from 24.2% to 26.0%. Food and beverages remain the most stolen commodity, growing considerably in 2022 by 2.8%. Automotive and fuel thefts are also up, and electronics, agriculture, and construction theft have fallen. Although hijacking has also fallen as a proportion of cargo theft, it continues to exert a real impact on global supply chains. Food, pharmaceuticals, and construction materials were affected the most.
Another of the report’s key findings is that unprecedented price inflation, exacerbated by the Russia-Ukraine war, but also an enduring legacy of COVID-19-related shutdowns and the resulting prolonged shortage of key manufacturing components, has awakened governments to the importance of global supply chains to national interests. This has led to the launch of new legislation such as the CHIPS Act and the Bipartisan Infrastructure Law in the US, and increased GPDR regulations across the EU, the combination of which is placing greater accountability on suppliers and purchasers. Government intervention spans efforts to bolster domestic supply chains, reduce carbon emissions, and enhance governance.
Carrier fraud, in which criminals imitate hauliers and other sub-contractors, including drivers with falsified documents, accounted for 84% of TT claims involving fraud or deception in 2022. TT is eager to pinpoint these risks and offer advice to industry on how to not just identify potential fraud but to minimize and avoid losses through them.
The report identifies six imperatives that businesses will need to address, including:
Monitoring rapidly changing regulatory agendas
Having a strong buy-in from top-level leadership
Address digital risk—not one organisation has solved this threat
Invest in tools and technology such as data analysis, IoT, cloud computing, information security, and predictive analysis
Be aware of the different, unique challenges facing each sector’s supply chain
Data, the metaverse, and cybersecurity will differentiate organizations’ approaches to building a solid supply chain
According to Susan Taylor Martin, Chief Executive of the British Standards Institution (BSI). “Given the turbulence of the last twelve months, 2023 will be an important watershed for many businesses– with those that successfully manage their supply chain risks being more likely to thrive.”
Jim Yarbrough, Global Intelligence Program Manager at BSI, said: “…Without intervention, businesses will see dramatic impacts on their bottom line, meaning that discussing supply chain issues at the C-suite level can help to ensure investments are funnelled to suppliers, building resilience to threats and supporting financial sustainability.”
NAVCIS AND BSI REPORT: KEY STATISTICS
Given the importance of supply chain resilience to the UK economy, you’d hope the issue of cargo crime was resonating at the highest political level. Freight movements in the UK account for 152bn tonne-kilometres annually and the industry – the fifth largest employer – contributes some £12bn to the national economy or £124bn in Gross Added Value (GAV). However, despite the importance of supply chains to national operations and infrastructure, a report from NaVCIS estimates that freight crime costs the United Kingdom economy some £420 million (€485m) a year. BSI also reports that a staggering 22% of transport operators have highlighted security as a key challenge for the future of the industry and the sustainability of their companies.
Areas of the country with higher cargo flow, like the Golden Logistics Triangle in the West Midlands, are more often targeted, according to Transported Asset Protection Association (TAPA). However, ports like Felixstowe, Blackpool and Belfast, as well as industrial areas outside London, are rife with road freight theft incidents.
In 2020, TAPA EME recorded 3,100 cargo theft incidents across the UK. The 83.7% crimes sharing a value produced a total loss of over £92 million. In the 18 months to the end of June 2022, a further 1,573 incidents were added to the Association’s crime database, including major incidents with an average loss of €250,833.
According to the BSI report, the top commodities stolen in 2022 were food & beverage (17%) fuel (9%), agriculture (9%) and electronics (9%). The study found that a strong increase in idle times led to an increase in cargo targeted at rest. Heald Managing Director Debbie Heald MBE shares the importance of perimeter protection for sites and locations where HGVs park: “To help stop HGV theft, haulage, delivery, and freight companies should consider implementing physical security products to mitigate theft and attacks.
THEFT TACTICS AND PREVENTION
With the rapid technological innovation, cargo theft tactics are also evolving to become more sophisticated. “There are some things about cargo theft that haven’t changed much over the years and there are many things that have changed significantly including new methods, targeted commodities, and the use of technology to commit cargo theft,” said Scott Cornell, Travelers Transportation Segment Lead, Crime and Theft specialist.
Here are some prominent cargo theft tactics to watch out for, and some steps that will help to prevent cargo theft.
- STRAIGHT CARGO THEFT
Straight theft, where cargo is physically stolen from a location where it sits, remains a threat. Cargo thieves are looking for whatever they can steal and sell quickly. Think truck stops, parking lots, roadside parking, drop lots and other areas where cargo could be left unattended, especially in store parking lots or empty lots on weekends. Thieves may look for temperatures on refrigerated trucks that indicate the presence of pharmaceutical loads, candy or other types of desirable cargo. Trailers with little to no security deterrents are easier and likely targets.
To combat this common form of cargo theft shippers and carriers should take a layered approach to security over the road by using good policies and procedures. Policies such as:
No unattended, loaded trailers, whenever possible; especially in high cargo theft areas.
Use high security rear door locks, security seals and air cuff locks.
If it is unavoidable to stage/drop a load, consider installing landing gear locks as well.
2. STRATEGIC CARGO THEFT
Strategic cargo theft, or theft that uses deceptive means, continues to evolve. This type of cargo theft can involve unconventional methods, including the use of fraud and deceptive information intended to trick shippers, brokers and carriers to give the load to the thieves instead of the legitimate carrier. Trends include identity theft, fictitious pick-ups, double brokering scams and fraudulent carriers as well as hybrid combinations of these methods used together to create even more confusion. Cargo thieves often look for loads being brokered late in the afternoon on Fridays in hopes that time constraints and deadlines will lend to mistakes and less stringent vetting of the carrier. Thieves may even generate false loads and post them to solicit bids in order to obtain the information they need to steal a company’s identity.
Another common tactic is where fraudsters pose as a forwarders using a freight exchange site and provide false instructions to a driver. They match a legitimate haulier to a shipper, facilitating the movement of goods. The fraudster then acts as a ‘middle man’ between these two legitimate companies, arranging the collection and directing the driver. Once the trucker has collected the goods, the fraudster provides new instructions to deliver to an alternative address where the cargo is stolen.
To avoid becoming a victim of strategic cargo theft, companies can employ strategies that will help ensure consistent and thorough vetting practices of any carrier or broker they do business with.
Research contact information and company information thoroughly through FMSCA, Internet search engines, third party vetting companies as well as industry associations.
Work closely with shippers to confirm positive identification of drivers at the point of pick-up, including driver information, identifying information on the truck and trailer being used, and the use of secure pick-up numbers.
Don’t hesitate to contact your customers and business partners if there is even the slightest question at any point in these processes. Often the additional scrutiny will deter thieves from pursuing the load in question.
TECHNOLOGY
Some cargo thieves are using “sniffers,” which are devices that help detect covert GPS technology, even those embedded within a trailer. Once a device is detected, they then use a GPS jammer to block that technology so it can’t be used to help law enforcement locate stolen goods. Others stage stolen loads in a parking lot immediately after the theft and wait to see if law enforcement will come in search of it.
CYBER
Basic types of cyber-attacks are being used to aid in committing cargo theft. Phishing emails may be sent in an attempt to install Trojan Horse malware that can infect a company’s system and grant access to sensitive data. This may allow cargo thieves access to pick up and delivery information, which they can use to print out copies of paperwork to commit fictitious pick-ups.
Implementing strong cyber security can help recognize and prevent many of these attacks. Companies should closely examine their websites and the information they make available to the public. Consider items such as:
Is contact information for key people important to show or would a common contact be sufficient?
Are you identifying current customers and/or referencing specific products handled?
“Protecting your online profile can be as important as securing the perimeter of your operations,” said Cornell.
SECURITY RECOMMENDATIONS AND SOLUTIONS
Government agencies in the UK are not entirely ignoring the need for better parking solutions. Last October, NaVCIS and NPCC state, the Department for Transport and National Highways announced £52.5m in match funding to encourage parking site owners to improve existing locations, inviting bids from operators aiming to improve parking security and/or driver welfare standards. It’s one small step towards the type of changes both organisations want to see.
The RHA’s Policy Lead on Infrastructure and Operator Licensing Tom Cornwell said: “There is an increased focus on security in the industry at present, particularly in light of the cost of living crisis. Our view is that although having first class toilet and shower facilities are vital, it lessens their positive impact if your cargo, fuel, or vehicle is stolen while you are using them.”
In the 2023 cargo theft report, BSI Practice Director of Security & Resilience strongly recommends adopting ISO 17712-compliant bolts and cable seals alongside a robust security checking procedure to enhance the protection layers of supply chains. The benefit of using these security seals is that after an item is sealed, it’s easy to tell if a product, box, or cargo container has been tampered with. BSI also provided some key steps to risk mitigation and security recommendations which include:
Seal rail containers with ISO 17712-compliant seals and conduct regular checks on seals, locks and documents
Use GPS on rail containers
Develop response protocols for security incidents and other irregularities
Ensure personnel are trained to inspect containers
Consider devices that can alert when doors are opened
Scott Cornell (Travelers Transportation Segment Lead) also suggests that fleet operators practice a layered approach to cargo security, starting with the development of internal processes and procedures. Then include regular training and awareness events for employees throughout the year.
“Everyone from drivers to warehouse workers should be trained to recognize, prevent and report cargo theft techniques,” Cornell said.
The following are features of a layered cargo security program:
Company security processes and procedures,
Usage of hard security devices, such as locks and seals,
Leveraging appropriate technology,
Reinforcing cyber-security to prevent access to key information
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