October 21, 2015 | Industry Insights
Fictitious Pickups, Insider Activity Gaining Popularity Putting Cargo at Risk
Cargo theft is a multibillion-dollar problem across the nation, including in big food-producing states such as California. According to the FBI, highly sophisticated thieves – who often act with some privileged knowledge – have stolen up to $30 billion worth of cargo each year, including highly valued nuts, fruits and vegetables, meat, soda pop, cookies, electronics and cigarettes.
Yet despite the extent of the food’s industry problem with cargo theft, lax security persists. According to FreightWatch International, which tracks cargo theft incidents, the vast majority (90%) of cargo thefts occur when trucks are left unattended at unsecured truck stops and other parking areas with minimal security. Fictitious pickups make up about 5% of cargo thefts, but this kind of ruse has gained popularity in recent years, says FreightWatch.
As an example, take what happened earlier this year in the spring. SunnyGem LLC, an almond supplier in Wasco, California, contracted with Left Coast Logistics to pick up a 42,000-pound shipment of almonds meant for Oregon-based snack manufacturer, Bridgetown Natural Foods. The driver pulled up to SunnyGem, loaded his trailer with the shipment, and didn’t deliver the almonds.
The stolen almonds were never tracked down and it appears that the unidentified driver was able to carry out the theft by tapping into some inside information. As a result, Bridgetown Natural Foods filed a lawsuit for $184,000 against SunnyGem and Left Coast Logistics.
According to the lawsuit, an employee from Left Coast Logistics had emailed SunnyGem a list of identifying information about the truck and driver who had permission to pick up the load. This included the driver’s name, the license plate numbers of the truck and trailer, and the identification numbers on the truck and trailer, according to the suit. The email also stated that the truck belonged to “AVG Transportation.” However, when the driver arrived pick up the almonds, the truck was labeled “Maynard Transportation, Inc.” – not “AVG Transportation” – and an identification number on the trailer read “533147” instead of the correct “7111,” with all other information matching the information sent in the email to SunnyGem. Even with these discrepancies, the driver was able to take off with the shipment.
Food shipments are attractive to cargo thieves because of their ability to resell the items easily. In fact, in 2014, 19% of cargo thefts involved food and beverages, which was higher than any other category of products, according to a FreightWatch report released this past summer. “Organized cargo criminals are actively and aggressively targeting food and drinks and will continue to do so,” the report said. “With no unique serialization to hinder the reselling of these products, criminals will continue to weigh the pros of easy obtainability and liquidation against the cons of perishability and medium-value density as they determine where to focus their efforts.”
It’s critically important that safety practices are implemented and that all the information is carefully checked regarding the truck, trailer, and driver before any shipment is released. Shippers should also fully vet their truck carriers to ensure they’re working with reputable companies.
Equally essential is having sound cargo insurance to respond in the event a shipment is stolen. Roanoke Trade provides insurance products and risk management strategies to protect your cargo in the event of a loss such as theft, and helps you minimize exposures and prevent losses. To learn more, please contact us at 1-800-ROANOKE (800-762-6653).
Sources: FreightWatch International, Oregon Live, Capital Press