The issue of cargo theft through double brokering remains a significant concern in the US trucking industry. Scott Cornell, a Transportation Lead and Crime & Theft Specialist, points out that it's getting easier for scammers to get their hands on MC numbers. And with sneaky moves like identity theft and made-up pickups, it's getting trickier for legitimate players to detect any foul play.
Data from CargoNet corroborate the gravity of the situation. Their report from the third quarter of 2023 shows a staggering 59% increase in cargo theft across the US and Canada compared to the same period in 2022. The main reason? Strategic theft – a form of fraud that has experienced a remarkable year-over-year increase of 430%. Meanwhile, traditional trailer theft only saw a 4% increase.
What is Strategic Theft?
Strategic theft involves acquiring a load by impersonating a legitimate carrier or broker, using fraudulently obtained authority, or deceiving truckers and carriers into divulging credentials to vital accounts. This method remains a primary concern due to its complexity and the various avenues it provides for thieves to exploit vulnerabilities in the freight system, particularly among small truckers and owner-operators.
Even though the digital era has brought many benefits to the industry, it's also made it easier for fraudsters to operate and has expanded their acting range. Hotspots like California, Texas, Georgia, Tennessee, and Illinois remain primary targets. However, the evolving tactics of cargo thieves mean that even previously unaffected states, such as Arizona, are now reporting higher incidences of freight theft.
What's there to expect in 2024?
The forecast for cargo theft in 2024 paints a challenging picture, with experts and industry reports pointing toward a worrisome upward trend. According to Crowell, "There's nothing indicating that this is gonna slow down at all." As we look ahead, the global supply chain is becoming increasingly intricate, introducing new vulnerabilities and making them more apparent to the watchful eyes of sophisticated thieves. These individuals are persistent and quick to adapt, utilizing ever more sophisticated techniques to exploit the evolving complexities of the supply chain.
Learn more: Preventing Fraud in Freight: Tips for Carriers
How can small truckers and carriers strengthen their defenses?
- Thoroughly vet brokers:
Before engaging with a broker, conduct thorough background checks and research their reputation in the industry. Ensure they are licensed and have a proven track record of honest dealings. - Verify broker authorization:
Contact the shipper directly to verify the broker's legitimacy and the shipment details. This direct communication helps ensure the broker is authorized and acting within the agreed-upon terms. - Signed contracts and agreements:
Always formalize your agreements in writing. Clearly outline the terms and conditions of the job in a signed contract with both the shipper and broker. This documentation serves as a legal safeguard in case of any disputes. - Utilize load boards with caution:
Though they are a valuable source of freight opportunities, use them cautiously. Verify the legitimacy of brokers, prioritize working with those already established, and reduce the risk of double brokering. - Implement technology solutions:
Leverage technology to enhance transparency and traceability in transactions and operations. Implement real-time tracking on every load to monitor movement and identify unauthorized subcontracting. - Invest in security technology:
Make trucks, trailers, and cargo harder to steal. Invest in high-security trailer door locks, air cuff locks, and landing gear locks. - Establish communication and risk protocols:
Regular check-ins and updates on the shipment status can help identify any deviations from the planned route or unexpected delays. Establish a plan in case of theft. If it happens, do you know who to call and what to do next?
Keeping our businesses safe from the rising threat of growing strategic theft is a top priority. That's why teaming up with a reliable and reputable factoring company may bring you extra peace of mind. Summar Financial, for example, specializes in assessing the creditworthiness of your clients, managing collections, and facilitating immediate access to cash flow through invoice factoring. We can provide truckers and carriers unlimited credit checks and fortify their business against fraud.
We're not just another financial service; we're your wingman, allowing you to navigate the twists and turns of the freight world with confidence. By partnering with Summar Financial, you can focus on the road ahead. Contact us now to learn more about Factoring and how it can help you mitigate the risk of falling victim to fraud schemes.