Trucking Joins to Fight Internet Thieves as Identity Theft, Fake Pickups Increase

This story appears in the Dec. 9 print edition of Transport Topics.

Increasingly popular Internet swindles are bringing a new dimension to the chronic problem of theft in the trucking sector, but the industry is uniting to battle this latest threat.

“The advent of Internet technology has produced an explosion of opportunities for thieves,” said Sam Rizzitelli, who heads trucking loss-prevention efforts for Travelers Insurance. He cited the proliferation of identity theft and techniques such as so-called fictitious pickups.

Security firm CargoNet said in a report that those pickups rose 25% last year.

Thieves use legitimate information on the Federal Motor Carrier Safety Administration’s website, Rizzitelli said, to mimic names, addresses or other data. One approach is to pose as a legitimate carrier and pick up someone else’s load or seek payment for a load they don’t move. Another scam is to pose as a shipper and dangle a fictitious load to get information from a carrier that can be used for future swindles.

“Each year, theft gets progressively worse,” said John Tabor, director of corporate security at National Retail Systems, who believes four in five cargo thefts go unreported. “Thieves that used to be involved with drugs have switched [to cargo theft] because of mandatory sentencing.”

“They know they can steal tractors and trailers on a regular basis and do little or no prison time,” said Tabor, citing one person caught stealing cargo nine times and spent just two months in jail.

Tabor’s company, which also operates Keystone Freight and employs 1,200 drivers, uses a “blind release” system to combat thieves using the Internet to transmit fake cargo information. That system requires drivers to present a specific pickup number provided in advance by National Retail Systems.

National Retail Systems also uses technology that captures a driver’s photo, license and thumbprint on every load as well as GPS systems on tractors and trailers as part of what Tabor calls a multilayered security approach.

Overall, cargo theft was little changed between 2011 and 2012 and is on track to decline this year, according to CargoNet. However, high-profile events such as last week’s theft in Mexico of a truck carrying radioactive material used in medical treatment still attract attention.

Geoff Stephany, Old Dominion Freight Line’s director of claims and security, told Transport Topics that the company uses traditional physical barriers such as closed-circuit TV, lighting and fencing as well as turning the tables on thieves by catching them when they use the Internet to try to sell cargo through auction or social media.

The less-than-truckload carrier uses other conventional approaches to catch thieves, too, such as rewards of up to $10,000 and law enforcement outreach.

“We feel it’s important to build relationships on a local level,” said Stephany, who is also a member of American Trucking Associations’ Supply Chain Security & Loss Prevention Council. “That helps when we are trying to get cooperation if an issue arises.”

“Law enforcement can’t stop the problem entirely,” Tabor said, urging industrywide approaches similar to those used by the pharmaceutical industry. Security groups formed by shippers have made strides to reduce theft and have created security protocols for trucking and warehousing facilities.

Brokers face a particularly challenging situation because their role as intermediaries exposes them to scams by those who pose as carriers and as shippers, Rizzitelli said.

As a result, the Transportation Intermediaries Association has formed a Fraud Task Force to create best practices for members and works with other associations, including ATA, TIA President Robert Voltmann told TT during the group’s annual meeting in Houston last month.

“It quickly became apparent that the scope of fraud and theft in the industry is enormous,” he said. “Theft is a nasty little secret that nobody wants to talk about very much. We have to deal with this on an industrywide basis.”

Several TIA members at the meeting shared their tactics.

Mark Boyer, director of operations at Con-way Inc.’s brokerage unit, urged paying close attention to carrier documentation.

“Verify the information,” Boyer said. “Make a phone call. Don’t issue [cash] advances on the first load.”

He also urged using carriers that have been in operation more than six months, and he outlined another scam in which brokers seek quick payment for a load that was farmed out to someone else.

Chris McLoughlin, cargo risk manager at C.H. Robinson Worldwide, said mobile technology has offered new tools to gather theft-related information. “All the technology is great, but unless you have a holistic plan to act, then the information is just that — information,” he said.

“Don’t let the devices lull you,” said Dianna Whitby, risk manager at H&M Bay, underscoring the value of persistence as she recounted a multiyear effort to track down a Florida thief.

James Lee, a vice president for broker Choptank Transport, urged that insurance for a particular shipment should cover a period a few days beyond the scheduled delivery date in case there is a delay and to prevent denial of a claim if a load that has been partially stolen arrives late.