Glenn Pogust, litigation partner at law firm Kaye Scholer, agrees that more food imports are fueling food safety concerns. “As the volume and variety of imported food products continues to rise, especially from an increasingly broad number of foreign sources, the potential for imported food products to be the cause of contamination or other forms of injury will also expand,” he cautions. “Because domestically-based importers are likely the only viable targets in the event of U.S.-based injury litigation, those importers should utilize all risk management tools reasonably available to them both with respect to their foreign suppliers and with respect to all aspects of storage and transportation of their products to the ultimate user.”
Meanwhile, food shipments have become the number one target for cargo thieves, according to FreightWatch International, surpassing electronics, base metals and apparel. Black market prices for food fetch 70 cents on the dollar compared to 30 cents or less for electronics, reports Tyco Integrated Security's Don Hsieh. The economic downturn coupled with rising commodities and food prices are fueling this trend...
How Carrier Identity Theft Can Lead to Cargo Theft
And 6 steps you can take to protect your food shipments
On Friday, May 20, 2011, a tractor-trailer pulled into a cold-storage warehouse in Los Angeles and picked up a load of Russian king crab. The driver was expected to deliver his cargo in Seattle the following Monday. Instead, he vanished—along with some 25,000 pounds of king crab with an estimated wholesale value of $400,000. The last anyone heard from the driver was on the Monday, when he called, supposedly from Oregon, to report that his vehicle was having mechanical trouble. In its frantic search for the freight, the load broker discovered that the driver’s contact information, documents, and his trucking company all were bogus, fashioned by a well-organized fraud ring.
Identity theft—assuming a legitimate carrier’s identity so thieves can schedule appointments and pick up freight—is among the fastest-growing types of cargo-related crime. While two out of three reported cargo thefts occur at unsecured parking areas, identity-related cargo theft is designed to give thieves access to secured yards and distribution centers, where the most valuable products are.
“This type of crime is frustrating and hard to detect because the transaction looks legit from the get-go,” says Jeff Hall, a private investigator and principal with Transit Risk Management in Dallas. “You or your load broker or 3PL hire a carrier to haul your freight, he arrives at your dock on time, his papers seem in order, and then he sits there while you fill his trailer with the stuff he’s going to steal.”
After he pulls away, the driver might check in with the broker once or twice to say everything is fine, and then the next call is from the receiver wondering where the truck is. When the broker tries to contact the driver or carrier, he ultimately learns that he’s calling a throwaway phone and writing to a bad email address. The broker is left to ask what did he really know about that carrier when he brokered the load?
Mitigating the risks
Identity-related cargo theft is more prevalent on the spot freight market and commercial load boards without the tools and data to help shippers and brokers verify carrier credentials as part of their due diligence.
“The very nature of the spot market is that shippers, brokers, and 3PLs need immediate available truck capacity,” says Michele Greene, group product manager at DAT, North America’s largest electronic load board network. “At the same time, there are new carriers and independent owner-operators who use commercial load boards as a place to establish relationships with brokers and 3PLs.”
Like any matching service where people initially meet online, you want to do your due diligence before you get together in person. While there’s no way to guarantee protection against identity-related cargo theft, you can mitigate the risk by carefully screening the carriers with whom you do business. Here are six steps you can take:
Step #1 Identify “Risky” Loads
The riskiest load isn’t necessarily the one with the highest value. Hall explains why:
Rather than take cargo for their own use, thieves typically resell stolen goods, using the money to fund other illegal activities. “The truck driver probably won’t know what he’s moving until later when he cracks open the trailer,” he says.
So thieves will look for clues based on routine information supplied by the broker when he posts the load: the type of trailer needed, the origin and destination of the load, insurance requirements, the urgency of the load, and so on.