Crime rings attacking US supply chain at record rates are using this sneaky tactic: report
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, according to a six-month CNBC investigation.
There’s been a record surge of cargo theft, with 3,798 incidents in 2024 – a 26% increase from the year before, according to Verisk CargoNet.
Total reported losses across the US supply chain last year reached nearly $455 million, according to Verisk CargoNet.
But several industry experts told CNBC that number is likely closer to $1 billion or more each year, since many incidents of theft are left unreported.
“Every day, we’re seeing the bad guys trying to infiltrate our network. And our sales reps have to constantly stay vigilant,” Jerry Jacobs, who oversees risk management at Prosponsive Logistics in Atlanta, told CNBC.
“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, according to police reports.
And 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, according to Verisk CargoNet.
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, according to the CNBC report.
Jacobs showed CNBC the platform, which included listings purportedly made by his company – but they were actually initiated by crooks, he said.
The problem is “noticeably increasing,” Birger Buesching, head of the supply chain for Philips’ personal health consumer business, including Sonicare toothbrushes, told CNBC.
“Two, three years ago, I didn’t have to worry about this,” Buesching 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,” Barry Conlon, CEO of Overhaul, a supply chain security risk management firm, told CNBC.
In February, officers found five boxes of Lacoste footwear at a store in Los Angeles that were part of a huge cargo heist, according to a police report.
And Lululemon in May reported a burglary at a distribution center in California, where thieves made off with “well over a million dollars’ worth of Lululemon product,” officials said.
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,” Ellen Kapiloff, Lacoste’s North and Central America vice president of operations, told CNBC.
“So, it might not be available to you at a store or online when you want it.”
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.”
As part of these complex schemes, hackers change a company’s phone number, email or address to their own on the Federal Motor Carrier Safety Administration’s website, where shippers register.
The safety agency regularly updates its security protocol and is developing a modernized registration system with stricter safeguards, an FMCSA spokesperson told CNBC.
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.
