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There is much motor carriers can do to help protect customers’ goods and their own assets and employees from heists.
May 2017, TruckingInfo.com - Cover Story
by David Cullen, Executive Editor - Also by this author

Late on a Saturday night in March 2010, as a powerful Nor’easter lashed the Northeast with high winds and heavy rain, a trailer was backed up to an out-of-the-way warehouse in the northern Connecticut town of Enfield.

Before dawn on Sunday, a crew of thieves entered the facility surreptitiously and loaded their trailer with a $60 million load of pharmaceuticals — driving off with the record for the biggest theft ever recorded in the Nutmeg State.

How did they do it? Well, for one thing, these crooks were, as the FBI put it in a recent press release, “experts at their trade, members of a criminal group known as the Cuban Mob,” who knew how to conduct surveillance, how to discover and disarm alarm systems, and how to load and move freight.

That dark and stormy night made it easy for the crew of thieves to case the joint unseen and check for security guards before backing into the dock. Then a ladder stashed earlier in the back parking lot was used by two of the burglars to get up on the roof, cut a hole, and lower themselves into the building. Once inside, they disabled the alarm — to anyone monitoring the system remotely, it seemed the storm had knocked the power out.

When warehouse employees arrived to work, they found the ladder, the hole in the roof, some discarded tools, and the alarm system beeping as if it needed a battery. Also discovered was the absence of 40 shrink-wrapped pallets of pharmaceuticals, including thousands of boxes of such brand-name meds as Cymbalta and Prozac.

“They took the cream of the crop,” said Special Agent Damian Platosh, who supervised the investigation out of FBI’s New Haven Division. “They loaded the exact number of pallets that would fit into the trailer. They knew exactly what they were doing.”

'Classic gumshoe work'

As word of the theft spread in the media, an anonymous tipster told police the heisters had Cuban names. The FBI was called in and thanks to “classic gumshoe work,” the bureau began to meticulously narrow the field of inquiry. Then they caught a break. A discarded plastic water bottle “broke the case wide open” as DNA found on it was matched to “a Cuban individual living in Florida with a history of cargo theft.”

That environmental irresponsibility ultimately helped finger four men for the crime. They’d split up in Connecticut after the heist and reunited in the Miami area, where the drugs were transferred into self-storage units. Agents then put the stolen merchandise under surveillance. While they waited and watched, the G-men bided their time by trying to tie the culprits to other unsolved cargo-theft cases.

In October 2011, a Florida storage facility was raided and the drugs stolen from Enfield were recovered. The four suspects were then charged with the Connecticut theft as well as several others, including $13.3 million in pharmaceuticals from a GlaxoSmithKline warehouse in Virginia in 2009; over $8 million in cigarettes and a cargo trailer from an Illinois warehouse in 2010; approximately $7.8 million in cell phones and tablets from a Florida warehouse in 2011, and more than $1.5 million in cigarettes from a Kentucky warehouse in 2011

Certain types of goods are in high demand by cargo thieves. Food and drink has been a hot category since the Great Recession, but electronics appears to be on the comeback trail. Source: CargoNet/Verisk Analytics

In each case, the stealthy crew entered a warehouse through the roof, silenced alarms, and loaded the loot into tractor-trailers. It was one crook’s DNA identified on a water bottle he tossed in Connecticut and on other items he threw away at the scenes of their crimes in Illinois, Florida, and Virginia that ultimately hauled the crew up short. “These criminals went on a $100 million robbery spree,” Platosh noted, “but in the end they were brought to justice.”

One could argue that for want of a recycling bin or a trash bag, they might well have gotten away scot-free — and very much richer. Indeed, the latest full-year FBI stats show that in 2015, 628 cargo thefts were reported in the U.S., and together they amounted to a stolen value of $27.87 million.

Adding injury to injury, the recovered value from those thefts amounted to just $5.49 million — a mere 19.7% of the stolen goods. Chemicals were the only type of load almost fully recovered (99.4%). The next biggest success was with RVs (85.1%), but most categories fell into a range from 0.0% to 5.3% recovered.

And while the valuation of those boosted goods included the cost of trucks (about $3.4 million) and trailers (about $2.1 million) stolen along with the loot, the total loss figures do not include any costs borne to track or recover the snatched cargo, nor any post-heist hikes to insurance premiums.

To thwart a thief

For fleets it’s not about how to catch a thief, but how to thwart a thief. Yet these career criminals are pros at what they do, so they adapt to changing conditions. So shippers and haulers must seek yet more intelligence on criminal activities and layer on yet more security just to keep pace with the thievery.

Cargo thieves know their markets. They know what sells and what sells fast. What they seek is also influenced by how shippers, carriers and law enforcement counter their nefarious strategies. If it gets too hot to grab or move certain loads, they move on to easier pickings. What gets boosted is even affected by general economic trends. There is one relatively static element to cargo theft: The hot spots are well known to crooks and cops alike, and they don’t change much from quarter to quarter or year to year.

“Cargo theft hasn’t necessarily gotten worse lately, but there is more sophistication on the criminal side than 20 years ago when it was strictly a crime of opportunity,” says Eric Fuller, CEO of U.S. Xpress, one of the nation’s largest truckload carriers. “Now, we’re dealing with larger groups [of thieves] who know what is on the trailer before going after it. They’re targeting the load. On the other hand, the technology available on our side to fight it is getting better.”

Scott Cornell, transportation lead and crime and theft specialist for Travelers Insurance, says it’s always hard to say definitively if cargo thefts are up or down overall, as “the federal government does not fully track it and the firms that track the activity do so with data received voluntarily, so the numbers are low.”

But he says when Travelers looks at the numbers, it can compare them with what its Special Investigations Group, which investigates thefts and educates customers, is seeing.

“From that perspective,” Cornell says, “the activity just moves around. One part of the country will be busier, then another. It’s like whack-a-mole. They shift when the heat is on, say from LA to San Bernardino. Law enforcement can’t always stop this crime — but they can move it around.”

He adds that carriers can buy technology to help thwart thieves, but “it won’t help if you do not have policies and procedures in place to protect the load, such as educating drivers on where to drop and not drop the load and where to stop and where not to stop.”

Based on expert input, following are six key areas to zero in on to help keep cargo thieves at bay, at least around your terminals, trucks and trailers.

1. Know the market

Cargo thieves are drawn like moths to a flame by high-value and/or quick-to-fence freight that is in high demand. And like any business, theft rings may be influenced by market conditions where they operate.

The FBI’s tally of cargo taken by type and value in 2015 indicates what’s most appealing to thieves starts with computer hardware and software at nearly $3.7 million, followed by portable electronic communications (smartphones, tablets) at more than $2.7 million, and “consumable goods” (presumably foodstuffs) at just over $2.3 million.

The rest of the stuff rolled goes from soup to nuts; from booze and cars (each valued at $500,000 plus) to drugs/narcotics (over $600,000) and industrial equipment (just shy of $1.1 million). There are over 40 categories, including “other,” which clocked in at almost $4.5 million.

Travelers’ Scott Cornell says technology will only help if anti-theft policies and procedures are in place.Photo: Travelers

A report issued by the Transport Asset Protection Association, which analyzes cargo-theft data, finds that in 2016, some states saw a departure from the “normal” listing of food and drink as the most stolen category, electronics as second, and home and garden as third.

For example, in Arizona, clothing and shoes claimed the top spot; in California electronics took first place, and in Illinois, alcohol took second place.

CargoNet, a cargo-theft prevention and recovery firm, reports that in this year’s first quarter, food and beverage products topped the most-stolen list, with 31% of all reported cargo thefts involving those commodities. Within that category, meat products scored the hottest (with 17 thefts) followed by nonalcoholic (9) and alcoholic (8) beverages. The next most stolen type were household goods, accounting for 15% of the quarter’s thefts.

2. Assess the threat

Cargo thieves avoid being caught by being sneaky, primarily targeting loaded trailers and containers that are stationary and unattended. Despite the emergence of a cyber threat, close to 75% of recorded in-transit thefts still involve grabbing unwatched trailers.

As to more creative ways to drive off with the goods, the rise of fictitious pickups is being closely monitored. While the Transport Asset Protection Association finds that fictitious pickups dropped slightly (12%) from 2015 to 2016, it says other indications suggest “this theft type is still being heavily employed” and notes that 43% of these attempts last year took place in California, which saw an uptick as well.

The Cargo Security Alliance explains that fictitious pickups involve crooks posing as legitimate truckers to steal cargo right from shippers — even setting up fake transportation companies to do so. “In a fictitious pickup, criminals fool companies into willingly turning over loads to them.  They use online load posting sites to win transportation bids, or simply show up as drivers with fake credentials, claiming to be assigned to a load. Variations of this scam include a recently terminated driver arriving in advance of his former employer’s assigned driver. The internet has increased the ease with which criminals can set up fake companies and acquire motor truck cargo insurance, and fictitious pickup schemes are proliferating.”

TAPA reports there were fewer recorded thefts (764) in 2016 overall than in 2015, but stresses the difference was only three incidents — which means thieves will likely get more ingenious. Combine that indication that cargo theft volume is steady with a 21% drop in the average value of stolen freight from 2015, and the group believes that “organized cargo criminals will have to become more creative, diligent or enterprising to maintain their income. As such, expect to see increases in atypical theft types, especially fictitious pickups, and a likely surge in theft volume if the average loss value remains at current levels.” 

The rate of theft for full truckloads via collusion is up again — any sort of “inside job,” where the thieves get help from a driver or other employee to steal a load. “After a spike in 2013, when collusion accounted for 5% of total thefts, it had been on the decline,” TAPA notes. In 2016, however, this theft type rose 60% to account for 3% of the total. “While the true number of collusion events may never be known, as when it is executed properly it is very difficult to detect, the rise in confirmed cases does point to this method gaining preference among cargo thieves.”  

Sometimes it doesn’t take collusion to get inside information. Cargo security is also tied to the security of yours — and your shippers’ — data. Last year, mega targets such as the Democratic National Committee, Yahoo, and LinkedIn — even the FBI — were struck by major cyberattacks.

TAPA warns that the cyber threat is expected to increase in 2017 and asks if “logisticians, transporters, and security practitioners at your enterprise recognize the seriousness of this continually growing threat?”

Other high-tech threats to watch for include the use of signal-interference devices (jammers) by cargo thieves to interfere with onboard telematics systems and tracking devices, which so far is seen more in other countries than here; and the 3-D printing of replacement cargo seals.

3. Beware hot spots

Hot spots are large metropolitan areas where a number of factors converge to attract and support cargo-thieving operations. Theft rings tend to operate to a significant degree in about 10 metropolitan areas across the country. Thefts may rise in one zone and drop in another, but overall the hottest spots remain so year after year.

Key factors that incubate hot zones are the huge volumes of freight that move through seaports under the watchful eyes of organized criminals, along with interchanges of major interstates and the unsecured truck stops that abound on them, which provide ample opportunities for thieves to steal a trailer full of cargo if not the whole rig.

“One other major factor is the presence of large, well-organized cargo theft rings operating in multiple states, such as those based in Southern Florida and California,” notes TAPA. “While data proves that cargo thieves are more than willing to travel across several states or more to seize targeted cargo, low-hanging fruit near to home is rarely passed up.”

TAPA also says that even though cargo theft is expanding into new zones, “traditional cargo-theft hot spots remain a key focus for the organized cargo criminal.” Its 2016 report keeps California, having logged 33% of total thefts and seen its rate spike 63% compared to 2015, in the top spot. Texas stays in second place, scoring 16% of total thefts for an 8% hike from 2015. New Jersey, which was fourth in 2015, takes third with 10% of the thefts. Florida, typically competing with Texas for second, drops to fourth with 9% of thefts, a drop of 36% compared to 2015. Georgia also slips a position, from fourth to fifth, thanks to its theft rate nosediving 60% to account for just 5% of the total. The biggest change in the lower half of the top 10 is the debut of Alabama (in ninth place) because its theft rate doubled from 1% to 2% of the total.

CargoNet’s report on Q1 ’17 activity finds that while the Golden State retains its dubious distinction of hardest hit (with 51 thefts), Texas is displaced by top-10 newcomer Ontario. The province has been hit by an astonishing 29 thefts — a 262% jump from a year before — with most of those occurring in the Greater Toronto area. This may turn out to be an anomaly, as the group notes that many of the thefts in these cities were occurring on the same street or even at the same address.

Within any hot spot, thieves play it safe and mainly try to boost cargo where it’s sitting. Over 80% of all thefts with a known location occurred within “unsecured parking” in 2016, says TAPA. The most frequently targeted such areas were truck stops (19% of all thefts), public parking (18%) and drop lots (11%). Yet of greater note is theft from “secured parking” doubled from 4% of known locations in 2015 to 8% in 2016. 

CargoNet points out that in Q1 ’17, secured yards (fully fenced trucking yards with fence designed for access control) were the most common site of cargo thefts, (32) followed closely by warehouse locations (32) and parking lots (28), such as those for major retailers.

Here’s a heat map of the hot zones where various factors converge to attract and support cargo-thieving operations. Southern California is usually the hottest zone, as is shown here. Photo: CargoNet/Verisk Analytics

4. Run smart

Cargo is most at risk when it’s a sitting duck. So, when it’s not moving, keep close tabs on it. The National Insurance Crime Bureau says the first line of defense is your own employees. For starters, it recommends background checks for all employees, but at least for drivers, warehouse workers, and anyone with access to shipment information and other logistics details.

And don’t overlook who you do business with. “Select transportation planners and intermediaries wisely, making sure they share your security philosophy,” such as strict pre-hire vetting of job applicants and security training for drivers.

NICB says training should include educating drivers on how to protect the truck from theft and hijacking. “Experience shows that a driver who knows, understands and follows the basic tenants of security is less likely to have their truck targeted.”

Industry experts point out that thieves typically “case” or follow loaded trucks on departure, waiting to strike when they stop. To avoid this risk, NICB recommends telling drivers not to stop within the first 200 miles or four hours. Also drivers should limit the time their trailers are unattended; park in well-lit, secure lots, and avoid traveling through known hot spots. And don’t entrust high-value loads to drivers on the job less than 30 days.

Security guards at facilities should engage in counter-surveillance by patrolling away from perimeters with an eye to spotting persons who are trying to eye what is going on with the trucks and cargo inside the fence, says NICB. Facilities can be breached, so install alarm and surveillance systems — and respond to every alert.

NICB also notes that vehicle- and cargo-tracking systems, vehicle immobilizers, anti-theft locking devices, and advanced security seals are now available at lower costs. “No matter what you install, combine it with a viable escalation-and-response plan” for managers and drivers to execute when a threat is identified or imminent. Also consider geo-fencing, tamper alarms and remote paging as in-transit security measures.

5. Outsmart with tech

Given the growing sophistication of cargo thieves, evident by cargo-targeting via load boards, the rise in fictitious pickups and the threat of jamming devices, FreightWatch International suggests a full-blown electronic freight security program. The provider of active-monitoring services says such a program will provide “real-time, end-to-end monitoring of cargo shipments through embedded tracking technology.”

Best-in-class EFS programs provide covert cargo security that combines embedded tracking devices in the cargo with sophisticated real-time monitoring, according to FreightWatch. Real-time location, status, and condition data are transmitted via Internet-of-Things and assisted-GPS devices. These in turn enable critical activity alerts. “These programs not only enable cargo monitoring, but also provide tracking, reporting, and recovery of high-value shipments in transit between manufacturing warehouses and delivery sites,” the company states in an EFS white paper. “All of this is delivered with the highest attention to security compliance and the management of pre-defined security protocols.”

FreightWatch notes that the most effective EFS solutions use technology that works in “impaired environments” where other GPS devices cannot. “For instance, aluminum containers and cargo holds are some of the most challenging environments for regular GPS devices, but not for sophisticated EFS solutions.”

U.S. Xpress CEO Eric Fuller says that to protect high-value cargo, the carrier “must do what we can to keep an eye on it,” including leveraging its SkyBitz as a Service trailer-tracking system to “see” trailers at any given point on the road. He points out that the solution keeps tracking a trailer even if thieves cut the tractor’s satellite link or use their own truck to haul that trailer away. Fuller notes that unlike a satellite link, the SkyBitz device can be difficult for a thief to access.

“Like anything else, preventing cargo theft comes from having a plan — and then pulling that together with technology,” says Theodore Wlazlowski, vice president and general manager of supply chain integrity for CalAmp. The firm provides LoJack-brand over-the-road supply chain integrity solutions. These use several technologies. For instance, small GPS tracking devices can be hidden on a pallet of cargo or even inside a single box so cargo can be discreetly tracked in transit. The devices provide real-time arrival notifications at the cargo’s final destination and sensor conditions while en route.

Wlazlowski says the idea is to use “discreet or covert” tracking methods that thieves won’t circumvent. “But don’t stop there. Where a driver stops may not be risky, such as at a secure location. But don’t make it easy for thieves to open the doors — or at least make it so you know when the doors have been opened. Think of it as starting with an early warning and/or making it more difficult to get the cargo.”

He says to expect the use of jammers to become more common, but notes that companies like CalAmp have systems available that can “obviate the use of jammers, such as by sending out multiple levels of signals.”

6. Stay ahead

There’s safety in numbers. Arguably, the best way to fight cargo theft is to link up with others in the supply chain to help remove weak links. Intelligence is what you want to gather, share, and receive with your customers, insurance carrier and law enforcement. That interaction will help keep you from driving blindly into trouble.

At minimum, work to establish lines of communications with law enforcement agencies in hot spots you service. That way, you can quickly report thefts so recovery efforts can be launched right away.

CalAmp’s Wlazlowski says today’s thieves “look for activity to engage in that is the least risky, and they do that by gathering intelligence. It’s still true that a load at rest is a load at risk. The better you protect your processes, the less your risk. Start with that and then surround what you’re doing with actionable intelligence” to keep the risk of theft as low as possible.

Also consider instituting your own regular security audits. “Cargo criminals are always coming up with new ways to defeat security devices and systems,” notes NICB. “By assessing your own system first, you’ll have the opportunity to close the gaps.”

Arpin Group, parent of household goods mover Arpin Van Lines, opted to go a step further. The company hired an anti-hacking firm to spend several days secretly probing its digital defenses and then attempt to break into systems by exploiting possible points of vulnerability, such as sending emails, texts and faxes to employees with malicious links or forcing entry with known software bugs.

The test will be repeated annually, at random so employees can’t prepare for it. “Cybersecurity is like a race that is never finished,” says Donald Frazier, senior vice president of information technology at Arpin. “[Now] we can identify weaknesses and patch them before a criminal can find them. And where the vulnerability might occur because of human error, we can train our staff how to watch for the newest scams and attacks.”