Jul 04, 2018
The methods may change but the adage remains true, Freight at rest is freight at risk.
Happy Fourth of July, your freight has been stolen. It could happen and does with greater frequency on holidays and weekends all across America. That’s the message – or more accurately part of the message - Scott Cornell, transportation business lead and crime and theft specialist at Travelers Insurance has been dispensing to the freighting community over the past 20 years.
Cornell has developed a very analytical approach to cargo theft. He divides it into two broad categories: straight theft and strategic theft. As Cornell explains it, “Straight cargo theft is where they [the thieves] physically go out, steal the tractor and the trailer, or the unmarried trailer, and take off with it. On the other hand, “Strategic cargo theft, is the type of theft where they use unconventional means, fraud, like identity theft, fictitious pickup, double brokering scams. That type of thing, where they trick you into giving them the cargo.”
While the basic categories have remained the same, cargo theft changes with the times – what Cornell describes as the “changing face of cargo theft.”
“I think that the straight theft category is a prime example, there’s a lot of things in straight theft that stay the same. In other words, they’re targeting the drop load [anywhere a truck stops to either load, unload or rest]…They are targeting those staged loads, but what they’re doing, when they steal them or after they steal them, has changed. So, you still have that consistent element of ‘they’re going to target those staged loads’ - the old adage of freight at rest is freight at risk, applies always when it comes to straight theft.”
However, while “they are targeting those staged loads…what they’re doing, when they steal them or after they steal them, has changed.”
According to Cornell, one of the biggest changes the industry has seen was the shift in theft of commodities. Going back to 2007 the economy was still booming, and people were spending money on luxury items – especially personal hi-tech electronics like cell phones, laptops, computers, tablets and IPads. So naturally, these items were the most targeted for theft. As Cornell put it, “One of the things they’re really good at is knowing what they can steal, that will sell.”
But when the economy nosedived during the Great Recession in 2010, the purchasing habits of the public shifted to basics such as housing and food.
Pistachios don’t have serial numbers
Thieves also adjusted to harder times. “So, they [thieves] made an acknowledgment, ‘that hey, we have to steal things that people are going to buy during these tougher times,’ and they shifted it over to food,” Cornell remarked.
But when the economy recovered, an unusual trend emerged. Food and other consumables remained a popular target for theft. One of the main reasons was food is much less traceable than electronics. As Cornell explained, with modern electronics “You’re activating them over the internet. You’re activating a warranty over the internet. The item itself is interacting with the internet. And as a result, the stolen items often can be located by investigators.”
On the other hand, food and beverages, have “no tie-in with the internet.”Cornell makes the point, “When we saw the nut load thefts go crazy in California, we always joked about the fact, pistachios don’t have serial numbers. You don’t activate them over the internet.”
As Cornell observed, “They [consumables] don’t have identification, especially when you remove them from the box. If you take something like frozen chicken, for example, it may come in a box, and that box may have some identifying information, but the minute you remove it from that box, all that identifying information is lost in the individual packages.”
From the thieves’ perspective, one thing about stealing perishables is if it’s not consumed or sold, “it can just be tossed away and it’ll spoil and disappear.”
Another reason thieves continue to target food and beverages is mitigated risk. The load value for food is lower than consumer goods. According to Cornell, the average load value for food and beverages is usually somewhere in that mid $70,000 to $80,000 range which generally falls below what the insurance industry calls high value load security protocols.
Strategic cargo theft
Strategic cargo theft has also undergone a significant shift. Cornell says that around 2012-2013 Cornell and his team noticed there was an uptick in identity theft and fictitious pick-ups and felt this could be a “big deal” for the industry.
By 2014, it was a big deal as the ‘fictitious pick up’ became one of the fastest growing methods used for cargo theft.
Although the term ‘fictitious pick up’ is a “catch all” for the entire category of theft as Cornell points out, “that’s not correct, because a fictitious pick up is a singular method of strategic cargo theft. And identity theft is a singular method, double brokering is a singular method. They’re all similar in that they’re not the same as straight theft, but they’re similar methods within that strategic cargo theft category.”
As Cornell explained to the AJOT, early on the style of thefts was “pretty much identity theft and fictitious pick ups.” But later thieves employed multiple methods such as the ‘double brokering scam’. The thieves will trick legitimate trucking companies into going and picking up a load for them, by posing as a broker. They will first pose as a trucking company to the broker, in order to get the load booked to them. Then they’ll turn around and pose as a broker to the trucking company. And then they’ll hire a legitimate trucking company, who has no idea that they’re being involved in this scam, to go pick up the load.
It’s a slick way to avoid getting caught at the point of pickup. “We’ve seen scam companies, that only exist on paper, they don’t even exist in reality. We’ve seen hybrid methods of using multiple methods within that strategic category to kind of throw people off.”
Cornell says he’s seen the strategic cargo theft category expand into probably more than a dozen different methods.
So, what happens when law enforcement catches on? From 2014 through 2017 Cornell says law enforcement “jumped all over it” and a number of theft rings were broken up and arrests made. But as Cornell points out, cargo thieves are “nimble” and what happened next was they reverted back to ‘straight’ cargo theft.
But Cornell says there has been yet another significant shift in crime over the last few years. There has been a significant increase in the use of technology by thieves to commit straight cargo theft. Some earliest cases were in the Southeast where the Georgia Bureau of Investigations (GBI) began seeing the use of “sniffers” and “jammers” in heists. Sniffers are devices that will detect covert tracking in the trailers and then jammers are deployed to jam those signals. Cornell relates that this is not new as thieves have used these devices “for a long time, and are very common in South America, Central America, and Europe.” But it was uncommon in the U.S. until around 2014, and now “it’s here to stay.”
A load at rest
Holidays and the weekends are the prime time for cargo theft – all the parked trucks look like a buffet line to a starving man. Cornell explains, “Holiday weekends are definitely known to have an increase in cargo theft. We’ve seen over the years an uptick in those three day-four-day weekend cargo thefts.”
There are a number of reasons for the increase in theft. During the weekends, there’s usually a lighter dispatch staff. Add in a Monday holiday and now you have an additional day of reduced staff.
Thieves have been known to tail truckers to understand their routes and habits. As Cornell explained, if the drivers get followed out of the DC and they park the load on Friday and it’s a holiday weekend with Monday off and the delivery isn’t until Tuesday, the theft might not be discovered until the load is delivered – potentially five days after the theft. To get that longer window, thieves like to hit the truck shortly after it has been parked.
The Fourth of July holiday this year is a little different, according to Cornell. Falling on a Wednesday in the middle of the week, thieves have a much shorter window of opportunity. “We’re curious to see how the statistics play out,” Cornell remarked of the 4thof July holiday. Still there is the chance that a trucker might pick up his freight on Friday and not deliver the cargo until Thursday – six days at rest and as the old adage goes, “freight at rest is freight at risk”.
Scott Cornell, transportation lead and crime & theft specialist, Travelers, has been in the insurance industry for 15 years and conducting investigations for 25 years, specializing in cargo theft, internal theft, embezzlement and corporate investigations. He has spent the last 15 years with Travelers, and currently is overseeing the cargo/transportation division. Cornell is a frequent speaker and instructor, and is a nationally recognized expert in the cargo theft field. He helped create a fully dedicated cargo theft unit for Travelers, known as SIG (Special Investigations Group), and is a co-inventor of a patented process for methods and systems for providing customized risk mitigation and recovery to an insurance customer. He and his team regularly partner with law enforcement and cargo task forces nationwide. He is a board member for Transportation Asset Protection Agency (TAPA), and serves on the TAPA Law Enforcement Committee.