Rising Supply Chain Thefts: Q2 2023 Sees Increased Cargo Risks
In the second quarter of 2023, CargoNet recorded a significant increase in supply chain risk events, with 582 incidents in the United States and Canada, marking a 57% rise compared to the same period in 2022. The majority of this increase can be attributed to ongoing shipment misdirection attacks, a form of strategic cargo theft where criminals exploit stolen identities of motor carriers and logistics brokers to divert and steal freight. These thefts amounted to over $44 million in stolen shipments, with an average value per event reaching $260,703 as thieves targeted high-value shipments.
Theft of loaded conveyances, such as full trailers, increased by 17% year-over-year in the second quarter of 2023, with California, Texas, Florida, and Illinois being the most affected regions. New York City and Philadelphia also experienced significant activity in this regard. Although there was a slight decrease in burglary of loaded conveyances due to recent law enforcement efforts, it remains a notable threat, particularly for high-value shipments along the I-40 corridor in Arizona, California, and New Mexico.
Extortion and theft by conversion schemes, carried out by organized groups in Illinois and California, showed substantial growth in the second quarter of 2023. These groups focused on obtaining shipments from logistics brokers and imposed inflated fees under false pretenses such as overweight tickets or previous rate penalties. Due to the complexity of criminal enforcement in such cases and its rarity, organized groups have become more audacious in their activities.
Furthermore, there was an increase of 127 fictitious pickups compared to the previous year, with the Los Angeles Metro Area being the most common location for such incidents. Fictitious pickups occurred throughout the continental United States, with certain counties experiencing significant problems due to their local industries. Various product categories were targeted, including alcoholic and non-alcoholic beverages, solar power energy generation equipment, and automobile supplies such as auto parts, fluids, oils, and tires.
Fictitious cargo pickups typically involve subcontracting shipments to legitimate motor carriers and misdirecting the freight to alternative addresses. To prevent such incidents, logistics brokers and shippers are advised to verify bids on shipments with the motor carrier, using contact information registered with the Federal Motor Carrier Safety Administration (FMCSA), and confirming that the motor carrier's name and driver match those indicated on the shipment tender. Motor carriers should exercise caution when dealing with new customers who request blind shipments to different addresses, especially public warehouses or cross docks in California.
