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Who's doing your hauling?  How Identity Fraud fuels Cargo Theft

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Eric Haruki
Cargo-Truck

When the term “Identity Theft” is brought up in conversation, our thoughts usually jump to the pain and consequences of a fraudster using someone else’s social security number to loot a victim’s bank account or go on a shopping spree using their credit.   Strategically minded fraudsters have gamed the system by implanting “synthetic identities” into a bank’s account books.  After creating an identity out of thin air using both real and fake personally identifiable information (PII), patient criminals then cultivate their ill-gotten credit over time, ultimately “busting out” by taking out a large loan they never intend to pay back.   

But perhaps too long hidden in the shadows is identity fraud that enables commercial cargo thefts that ultimately increases the costs of goods for all of us and can also put our safety at risk. 

Hidden heists no more 

Loaded container trucks are rarely today stolen straight out of a warehouse parking lot.  Thanks to ever advancing tech innovations, these audacious thefts have largely been defeated by GPS tracking, high-end locks, and a variety of other security devices and measures.    

But just as one side of the tech sword is perpetually sharpened by the forces of good, fraudsters and criminals never stop honing their blade to exploit technology for their nefarious goals.   

Case in point: Cargo thieves no longer need to conceal their actions under the cover of night but instead use the Dark Web to illicitly obtain PII and fabricate identities and will look you in the eye as they drive off with millions of dollars of your goods.   

Today’s cargo thieves are able to assume the identity of truckers or establish an entire trucking company, often by reactivating a dormant Department of Transportation carrier number from a government website for as little as $300.  That lets them pretend to be a long-established firm with a seemingly good safety record.  

The fraudsters are able to generate and offer up paperwork such as insurance policies, fake driver’s licenses, and other documents demonstrating their presumed bona fides.  They offer low bids to the freight brokers who handle shipping logistics for numerous companies. When the fraudulent truckers pull up to a company’s warehouse dock, all seems by the book and legitimate until the goods are never seen again.

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Industry research reveals that new trucking scams are growing 6%, quarter over quarter.  Of the average three to five truckloads stolen each day in the United States, at least one involves a fraudulent or fictitious pickup.  For its part, LoJack examined 947 cargo thefts last year and identified 45 of them as fictitious pickups, with an average loss of more than $170,000 per incident. 

Pain in numbers 

The trucking industry in the United States moves more than 68% of all domestic shipments, and so these cargo thefts hurt overall commerce, drive up insurance rates for companies, push up consumer prices, and potentially allow unsafe food and drugs to reach store shelves. 

The internet and online commodity tracking databases help fraudsters decide what type of commodity to target.  A few examples of individual but massive value cargo thefts: 

  • 80,000 pounds of walnuts worth $300,000 in California 
  • $200,000 of Muenster cheese in Wisconsin
  • Rib-eye steaks valued at $82,000 in Texas 
  • 25,000 pounds of king crab worth $400,000 in California 

Hughson Nut Co. of Livingston, CA fell victim twice in one year.  Each time, the impostor truckers showed up at the nut processor with seemingly all the proper paperwork and identifications and hauled away a load of almonds valued at $189,000. 

When food items fall outside the defined confines of a secure supply chain, receiving processors and retailers cannot risk the safety of the consuming public and so the food (if recovered at all) must be destroyed.  Similarly, stolen pharmaceuticals might require a global recall of every drug with that lot number to ensure none of the product finds its way into pharmacies in case it was tampered with. 

That said, stolen foodstuffs can wind up in the “gray / black market”, ultimately into small grocery stores.  But by no means are the overall illegal operations small – frequent federal raids find distribution warehouses filled with stolen steaks, shrimp, energy drinks, ice cream and other frozen foods. 

Food loads in particular are difficult to recover as this cargo category generally does not have any serial numbers to trace.  Further, companies don’t realize they have been scammed until their shipments fail to show up at their intended destination, usually four to five days after they were stolen.  By that time, the goods have probably already been sold and transferred to the black market. 

Overall, food and beverages are the most commonly stolen items, accounting for 23% of all thefts, followed by metals at 16%, and electronics and household goods at 12% each.  Other products made up the remaining 37%, including pharmaceuticals at 3%. 

For the past few years carriers reported nearly 1,200 cargo thefts (per year) of all kinds nationwide, but since many thefts go unreported, the actual figure is likely far higher. 

Know who you’re working with

The California Farm Bureau Federation as well as the greater trucking and insurance industries warns about clues that could indicate a suspicious hauler:  

  • Temporary name placards 
  • Temporary identification numbers on the truck 
  • Abrupt changes in the time of the pickup 
  • Lack of a GPS tracking systems 

But before all that, UVeritech recommends fundamental, proactive vetting of driver and tracking company information before awarding shipping contracts to unfamiliar truckers.  And always authenticate and document your driver’s identity to mitigate risk, and ultimate loss and downstream liability.   

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