Savvy criminals fueling a spike in cargo thefts

In Indiana and nationwide, the logistics industry is grappling with a recent surge in an age-old problem: cargo theft.

On a basic level, cargo theft can simply involve breaking into a truck and stealing items while the driver sleeps. But more recently, criminals have begun adopting technology—everything from telephone spoofing to artificial intelligence—that turbocharges their ability to steal cargo in a host of new ways.

“They’re getting very complex. It’s very organized,” said David Francis, the chief financial officer at Fort Wayne-based trucking company Buchanan Hauling & Rigging Inc. Buchanan also offers freight brokerage services under the name of Buchanan Logistics.

Francis said Buchanan has seen a noticeable uptick in cargo theft attempts over the past six to 12 months, some of which are coming from criminals in Eastern Europe and other international locations.

Indianapolis-based freight broker Spot Freight Inc. has seen it, too.

“The start of 2023 into 2024 is really when this started to become a prevalent issue. Prior to that, you would have an occasional theft that happened, but nowhere near the degree to which we’ve seen it in the past 24 months,” said Spot Freight Chief Financial Officer Andrew Krop.

“The new development is the extent to which bad actors are leveraging technology and leveraging weaknesses in the supply chain to effectuate these kinds of thefts,” Krop said.

Earlier this month, during a one-day customer summit downtown, Spot devoted part of its programming to cargo theft prevention.

According to data from Verisk CargoNet, reported incidents of cargo theft more than doubled in the last three years—from 1,664 in 2021 to 3,800 in 2024. California is the nation’s cargo-theft hot spot by far, with 412 incidents reported last year. Indiana ranked seventh, with 31 reported incidents.

That data doesn’t include only thefts involving truck freight. It also include cargo that travels by rail, air or other means.

Those numbers might not seem large, but they likely represent only a fraction of actual cargo thefts, said Keith Lewis, Verisk CargoNet’s vice president of operations.

Within the logistics industry, Lewis said, it’s believed that CargoNet’s numbers represent only about 10% of actual incidents. Part of the reason the crime is so underreported, he said, is that companies might hesitate to report a loss for fear that it could hurt their reputation.

For exactly this reason, Francis said he was hesitant to give details about specific incidents other than to say Buchanan brokered more than 160,000 shipments last year and lost maybe two or three to fraud.

But Buchanan and Spot both say they regularly detect would-be thieves who are using a wide variety of ways to try to trick them.

Scammers’ tactics

One common method is to pose as a legitimate carrier.

A criminal might, for instance, infiltrate a legitimate company’s computer system to glean information about upcoming shipments, then show up at the loading dock and collect the freight. Or the criminal might use technology to spoof a phone number, making the call appear to come from a legitimate trucking company. The criminal might then contact a freight broker and attempt to secure a load.

In both scenarios, a driver picks up the load from the unsuspecting shipper—but instead of making it to its rightful destination, the cargo disappears into the criminal’s control. Sometimes, drivers might not even know they’re facilitating theft.

Other times, a criminal might purchase a trucking company, converting it from a legitimate carrier to a vehicle for theft.

Krop said this second type of impersonation has become more prevalent for reasons related to COVID-19.

Here’s the connection: Pandemic-related consumer spending shifts and supply-chain disruptions created intense demand for trucking services, driving shipping rates way up. In response, a lot of new trucking companies popped up.

But when the shipping boom cooled, there wasn’t enough business to keep all those companies afloat—and some were looking to sell.

That, Krop said, provided an opening for criminals who saw that in acquiring a trucking company, they would also acquire the legitimate credentials needed to meet federal regulations.

“They look to the marketplace like a legitimate motor carrier,” Krop said. “They have a motor carrier number, they have a certificate evidencing that they’re a fully authorized carrier. But in reality, they’re not.”

Francis said he’s also seen cases where thieves have been able to spoof data coming from tracking devices. To the unwitting observer, a load appears to be traveling an expected route to its destination. In reality, the cargo is headed somewhere else.

“It’s just every which way from Tuesday,” Francis said. “We’re seeing everything deployed.”

The trucking industry is highly fragmented, which can also make it easy for criminals to hide in plain sight. According to the American Trucking Associations, more than 577,000 carriers were registered in the United States as of March 2024; more than 95% of those carriers operated fleets of 10 trucks or fewer.

Fighting back

Krop and Francis say their companies use a variety of vetting methods, including fraud-detection technology, to catch the scammers. That includes tools to detect phone spoofing, and technology that can verify a computer’s internet protocol, or IP, address. IP verification could, for instance, show that someone who claims to be in a particular state is actually using a computer located somewhere else—a red flag.

Smaller companies, though, might not have the same resources as a Spot or a Buchanan.

“With our controls in place, we’ve caught a lot of these [theft attempts],” Francis said. “If somebody’s small, or unsuspecting, or doesn’t pay for these technologies, they’re rolling the roulette wheel every time they hire somebody.”

When cargo is stolen, the most obvious victim is the party that owned the cargo. But the crime creates a widespread ripple effect, Verisk CargoNet’s Lewis said.

The owner of the cargo—which might be the shipper, the warehouse facility or some other party based on the particular contract for that load—typically files an insurance claim for the loss. Lewis said this leads to higher costs all the way down the line: insurers, shippers, retailers and consumers.

“You and I are paying for this when we buy goods,” he said.

The problem has caught lawmakers’ attention. In February, Indiana’s U.S. Sen. Todd Young, a Republican, chaired a subcommittee hearing on cargo theft and its potential solutions.

During that hearing, Young highlighted the case of Evansville-based PFL Logistics, which lost a $60,000 cargo shipment that was stolen by what Young described as “a previously trusted carrier.”

An aide in Young’s office said combatting cargo theft is a topic that appears to have bipartisan support among lawmakers. “It’s something that we’re tracking very closely.”

The aide spoke to IBJ on the condition that their name not be used.

Young is among 28 cosponsors of S.B. 1404, the Combating Organized Retail Crime Act, which was introduced by Sen. Chuck Grassley, a Republican from Iowa. That bill, which was referred in April to the Senate Judiciary Committee, which Grassley chairs, would create a national center that would, among other things, facilitate information sharing and help with crime investigations.

“States face resource and investigative challenges from [criminal] groups operating beyond local, state and regional law enforcement capabilities,” the legislation reads in part. “More needs to be done to address the cross-jurisdictional, interstate and international aspects of these crimes.”•