The trucking industry has been a long-time target of opportunistic and organized crime – from vehicle hijackings to robberies at delivery points. Both carriers and shippers have spent countless resources to prevent this cargo theft. However, criminal organizations are getting savvier every day about how they perform these thefts. The latest trend, facilitated by exploiting the Internet and common identity theft techniques, is for criminals to pose as legitimate carrier. This latest trends cannot be prevented with seals, locks, and tracking devices.
In the quest for more cost-effective transportation solutions, companies often use Internet load boards, communicate by e-mail and use mobile phones and brokering loads in a somewhat anonymous transaction. Organized criminal organizations know well how to exploit these systems to pose as legitimate carriers and obtain freight; a very low-risk, high-profit opportunity.
One technique being used is that someone poses as a driver from a legitimate carrier assigned to a load to go pick up the freight. In this scenario, once the load information has been obtained, the imposter arrives early at the pickup location in a truck that looks like the assigned carrier; or may even be a truck stolen from the assigned carrier. The theft is usually discovered when the legitimate driver shows up for a load that has already been released. The downside for the criminals in this scenario is (1) the risk of discovery if they are using a stolen tractor and (2) their lead time is limited to the length of time between the theft and when the legitimate driver arrives.
Criminals have also thought of ways to overcome the challenges in the last scenario. This technique involves creating a business-partner relationship with a shipper or broker using fraudulent information. For example:
- A high-value load is identified from an Internet load board. While load information may seem generic, the load is usually identified as “high-value” based on a known pick-up location, insurance requirements or its destination.
- The fraudulent employees will contact the shipper with interest in the load. Pulling information from the Internet, they’ll establish themselves as a carrier by replicating, and slightly altering, a legitimate carrier’s information. They’ll probably target a small carrier from another part of the country that is unlikely to already be in the shipper’s system. They will submit registration documents with slightly altered phone numbers or addresses and what appear to be legitimate insurance documents.
- If they are awarded the load, they will provide a driver’s name and mobile phone number.
- The transaction seems normal until the load never arrives at its destination and the carrier and driver disappear. The mobile phone will continue to work for a few days to provide updates and then will eventually stop working. This often allows anywhere from a few days to a week of lead time before the theft is detected.
How can shippers prevent or mitigate this risk?
There is no single technology or procedure to combat this risk. A layered approach, depending on the operation and types of goods being shipped, is always best. This involves careful background checks on carriers, establishing driver verification processes, protecting proprietary shipping information and employee training to help them recognize this type of fraud.
1) Vetting Carriers
It’s important to verify the legitimacy of every new carrier you work with. This includes independently validating information submitted by each one. Remember, the contact information submitted by a new carrier could be just as false as the registration numbers, addresses, etc. There are a variety of services that can help shippers validate carriers, but there are also a number of steps they can take on their own to reduce the risk.
The information submitted by a carrier should be compared with information obtained through independent sources such as yellow pages, internet searches and DOT profiles. If the information submitted by the carrier is slightly different from what you find through a separate source, this should raise a flag and call for additional investigation. Once you’ve established the legitimate contact at the carrier, give them a call directly. Confirm that they have requested to be set-up as a carrier and validate their information. Shippers can also contact their insurance carrier separately to verify their policy, dates, limits and carrier contact information.
Finally, when it comes to vetting carriers, if you release loads to brokers, be sure they have similar processes for vetting their carriers. Also, be aware that it is not uncommon for carriers to broker or assign loads to other carriers without the shipper’s knowledge. It’s up to the shipper to decide whether this type of activity will be allowed and how best to insulate themselves from fraudulent activities through contract language.
2) Driver Verification
When shipments involve high value goods, food, or hazardous materials, it’s important to verify the identities of drivers when they pick up a load. When possible, request that the assigned carrier provides pre-arrival information such as the driver’s name, vehicle number and arrival time. Be suspicious of drivers that arrive hours ahead of their appointment, as this may be an imposter. Dispatchers that are releasing loads to drivers should contact the carrier if the information they were provided does not match the driver or carrier that arrives to pick up a load.
Shippers can also take steps to ensure that the driver’s license is legitimate. A reference book with verifying information for government issued IDs can help spot false credentials. An ultra-violet flashlight can verify hidden watermarks that are embedded on most government issued IDs.
Other steps that can help deter criminal activity include capturing digital images of drivers using CCTV or taking digital still photos. Dispatchers can even use inkless fingerprint pads, commonly used in banks, to have the drivers leave their thumbprint on shipping documents retained by the shipper. While these steps may not directly prevent a fraudulent pick up, they can greatly aid in the investigation and may indirectly deter fraudulent activity.
3) Protecting Shipping Information
Most of us have heard about the dangers of releasing personal information such as social security numbers or account numbers. And while we have heeded these lessons in our personal lives, we don’t always apply the same discipline when it comes to protecting shipment information. In today’s data intensive world it’s more critical than ever to protect any information that could be used to identify or target shipments.
Sometimes it’s as innocent as an employee giving shipping information over the phone to what sounds like a legitimate carrier inquiry. Or it could be as simple as sending an advance shipment information to destination sites that gets printed and posted on the receiving dock. Shippers need to balance the need for sharing this information with the threat that it could be used to target their loads.
It’s also important to train employees about how to handle calls from carriers or individuals looking for information over the phone. Transmitting shipment data via EDI, versus e-mail or telephone, is the most secure way to ensure information is getting to a credible partner. Employees that have access to systems containing shipping records should have individual assigned usernames and passwords that must be reset on an appropriate schedule. Personnel who administer these systems should routinely audit access records for unused usernames and deactivate them.
4) Employee Training
Preventing the release of shipments to fraudulent carriers is about having the right systems, processes and procedures in place. But this relies on having well-trained employees to execute these procedures. There have been several alerts generated recently from various sources identifying suspect carriers. However, it is not enough to simply distribute these alerts as carrier names can be changed with a few keystrokes. Employees must be trained on the methods used by fraudulent carriers so that they can recognize future attempts.
Employees who are responsible for setting up new carriers must be aware of the threat posed by fraudulent carriers and the proper steps they should take to verify the carrier information. Employees who have access to shipment information must be trained on the need to protect this information and recognize attempts to gather sensitive information. Dispatchers who are releasing loads must be trained on how to validate driver credentials, the actual driver and the carrier identities. Lastly, any employee who has access to electronic systems must be trained on the importance of not disclosing usernames and passwords.
While the threat posed by driver imposters and fraudulent carriers may not be new, today’s reliance on systems and the need to drive out cost creates an environment for exploitation of by a creative criminal. Combining the right processes and technologies with a highly trained and diligent workforce is the most effective way to mitigate this security risk.
To learn more about how to prevent Cargo Theft, read our Cargo Theft White Paper now.
Written by Bill Anderson
Bill Anderson is Group Director, International Safety, Health & Security for Ryder, a leading provider of transportation and logistics solutions.
