Crime Rings Attack US Supply Chain at Record Rates Using Sneaky Tactics
Organized crime rings have been attacking cargo trucks, train cars, and warehouses across the United States at record rates using a sneaky new strategy, according to a report. Behind this phenomenon are criminals who hack into supply chain technology and impersonate legitimate shipping companies, falsely promising to deliver cargo to buyers but instead stealing it for their own use.
The number of cargo theft incidents has skyrocketed, with 3,798 reported cases in 2024 - a 26% increase from the previous year, according to Verisk CargoNet. Total reported losses across the US supply chain last year reached nearly $455 million, but industry experts estimate that the true figure may be closer to $1 billion or more each year.
"Every day, we're seeing the bad guys trying to infiltrate our network. And our sales reps have to constantly stay vigilant," said Jerry Jacobs, who oversees risk management at Prosponsive Logistics in Atlanta. "I say this all the time to my sales folks, that there's probably a 33% chance that you're going to be talking to a bad guy that's looking to steal freight."
Last December, The Post exclusively reported on an incident of this strategic theft that cost a toymaker more than $1 million worth of holiday merchandise. London-based Flycatcher lost 12,600 toy projectors in mid-October after its broker accepted bids from two seemingly legitimate firms that turned out to be thieves impersonating the two companies.
These identity thefts are only on the rise, accounting for 8% of all cargo theft in 2020 - and jumping to nearly one-third by the end of 2024. Criminal groups from at least 32 countries have been linked to these scams, according to Verisk CargoNet.
Brokers hired by companies to organize shipping matters often use an online platform called DAT Freight and Analytics, which was found to be a target for scammers. "The problem is noticeably increasing," said Birger Buesching, head of the supply chain for Philips' personal health consumer business, including Sonicare toothbrushes.
"Two, three years ago, I didn't have to worry about this," he added. While major companies have been targeted by these crime rings, many are unlikely to report the crimes to authorities or speak publicly on it.
"A lot of cases, they don't report it because they feel they're not going to get it back. It's been weeks since they lost it and they've just found out about it," said Barry Conlon, CEO of Overhaul, a supply chain security risk management firm.
Consumers could start to see the effects of widespread cargo theft, as it forces retailers to hike prices and struggle to fill floor inventory. "If you're a consumer and you wanted this shirt and we only made 100 of them and 50 of them were stolen, we are strategically going to place the other 50 in a different location, as well as a different channel," said Ellen Kapiloff, Lacoste's North and Central America vice president of operations.
Lululemon said it is taking action to combat retail crime and that in this case, its "collaborative investigation led to arrest and recovery of stolen products."
Combating Cargo Theft: Proposed Legislation
Shipping companies have been taking measures into their own hands, investing millions of dollars into upgraded security systems. Some legislation to combat the growing crime tactic has also been introduced. Rep. David Valadao of California, along with other lawmakers, in April introduced the Combating Organized Retail Crime Act, which would create a coordination center within the Department of Homeland Security to tackle retail crime, including cargo theft.
The bill is pending. Meanwhile, a bipartisan bill introduced in the Senate known as the Household Goods Shipping Consumer Protection Act would give the FMCSA the authority to impose civil penalties and stricter regulations against impersonators.