Overhaul estimates 35% rise in cargo theft in 2024

Risk management company Overhaul predicts cargo thefts will rise by about 35% in 2024, according to its annual report released this month. As the landscape for criminal activity broadens with the increase of digitalization , it is up to shippers to advocate for change, Danny Ramon , Overhaul’s intelligence and risk manager, told Air Cargo Next. “We’re definitely seeing much more cargo theft activity,” Ramon said. “And the activity that we’re seeing is much more sophisticated and targeted, such as that they’re able to get away with much more value in freight.” [caption id="attachment_57140606" align="alignright" width="470"] (Courtesy/Overhaul)[/caption] Overhaul reported 1,183 cargo thefts last year in the United States, with an average value of $587,917 per theft. The numbers represent a 9% increase in volume and a 67% increase in value from 2022. The report also indicated that in 2023, there were: 229 cargo thefts in the first quarter; 208 cargo thefts in Q2; 457 cargo thefts in Q3; and 289 cargo thefts in Q4. Airports and seaports are typically protected by varying degrees of enhanced security and they are not hotspots for criminal activity, Scott Cornell , vice chair of the board for the Transported Asset Protection Association and second vice president transportation leader, crime and theft specialist at Travelers Inland Marine , previously told Air Cargo Next . “By and large, airports are one of the safest places for cargo in the United States ,” Ramon said. “Now, there are exceptions to that. When there are exceptions to that, they tend to be really big exceptions ,” he said. An Air Canada cargo shipment worth $14.8 million was stolen from Toronto Pearson International Airport (YYZ) in April 2023. The case remains unsolved. Theft, fraud by deception Strategic thefts or thefts by fraud or deception have grown alongside advances in technology, Ramon said. This is because these crimes are “much more scalable,” he added. Strategic thefts by deception can be accomplished by one bad actor and their computer, Ramon said. “A theft by fraud or strategic theft does require a little bit more technical and specialized know-how, but that’s not necessarily difficult to get, especially if you’re already involved in the supply chain and logistics industry,” he said. Once a criminal has gained access to digital booking systems or a carrier’s network information, they “could steal a dozen loads in a day from behind the keyboard and never come into contact with that freight,” Ramon said. “That’s what the industry is dealing with now.” Not only is this type of theft more scalable, efficient and low-risk, but it is harder to track, Ramon said. Digitalization, fraudulent activity Fraudulent activity in the supply chain has increased as more companies digitalize their operations , especially since the pandemic, Terri Luttrell , compliance and engagement director at Austin, Texas-based risk and compliance company Abrigo , told Air Cargo Next . “Undoubtedly, the pandemic caused a perfect storm for expanding all forms of fraud,” Luttrell said. “With the increase in the number of people working from home and the need for business to be conducted online, there have been more opportunities for fraud to occur. Internal controls were lacking during part of the pandemic, especially at the start. With the financial devastation and loss of life and health that many felt during the pandemic, the group of vulnerable targets increased significantly.” Luttrell also attributes the increase in fraud and deception to: Increasing reliance on digital transactions . With the rise of digitalization in business processes, including invoicing and payment, there are more opportunities for fraudsters to exploit vulnerabilities in electronic platforms. The ease of sending and receiving invoices digitally makes it easier for fraudulent invoices to go undetected. Sophistication of fraud techniques. Fraudsters have become more sophisticated in their approaches, utilizing advanced technology and social engineering tactics to perpetrate invoice fraud. Phishing emails, malware attacks and spoofed websites make it easier for criminals to deceive unsuspecting individuals and businesses. Globalization and complex supply chains. Businesses are increasingly operating on a global scale with complex supply chains involving multiple vendors and partners. This complexity creates opportunities for fraudsters to insert themselves into the payment process, making it harder for companies to detect fraudulent invoices from legitimate ones. Pressure to process payments quickly, In today’s business environment, there can be pressure to process payments rapidly to maintain smooth operations and satisfy vendors. This pressure may lead to shortcuts in verification procedures or less scrutiny of invoices. Protections in place While digitalization may create some opportunities for fraudsters and thieves to infiltrate cargo operations, there are ways to protect shippers , Luttrell said. Segregating duties, creating a master vendor list with up-to-date data and creating multiple forms of two-factor authentication for each step of the shipping process can help reduce crimes in the supply chain, she said. One of the best ways to mitigate crimes is to “educate employees with job-specific training on the various forms of fraud and how to recognize suspicious invoices or payment requests,” Luttrell said. “Encourage a culture of vigilance and empower employees to question unusual requests or discrepancies.” Register here for Air Cargo Next ’s free webinar, “The Role of Drones in the Future of Air Cargo,” on Tuesday, March 26, at 11 a.m. ET .

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