Cargo theft is escalating across the United States as organized crime rings adopt sophisticated tactics to undermine the supply chain. Criminals are increasingly utilizing technology to impersonate legitimate shipping companies, leading to a spike in thefts that has caught the attention of law enforcement and industry experts alike.
In 2024, reported incidences of cargo theft soared to 3,798, marking a staggering 26% increase from the previous year, according to Verisk CargoNet. This spike reflects a broader trend that has resulted in nearly $455 million in losses for the U.S. supply chain last year alone. However, experts suggest the actual figure may exceed $1 billion annually, as many instances go unreported.
Jerry Jacobs, a risk management executive at Prosponsive Logistics, emphasizes the alarming frequency of such crimes. He warns his sales team that they might be engaging with individuals looking to steal freight during routine business transactions. “You could be deciphering a legitimate inquiry from a fraudulent one,” Jacobs states.
The impact of these crimes extends beyond financial losses. Reports have indicated that a toymaker faced a substantial hit last holiday season, losing over $1 million worth of merchandise due to thieves masquerading as legitimate brokers. Additionally, the rise in identity thefts among cargo thefts has grown alarmingly from 8% in 2020 to nearly one-third in 2024.
Brokers are often unaware that their online platforms are being exploited by criminals. Many utilize services like DAT Freight and Analytics to facilitate shipments, making them vulnerable to fraud. Birger Buesching, head of supply chain operations for Philips’ personal health consumer products, expresses concern over the growing threats he now faces in his role. “Two or three years ago, we didn’t have to worry about this,” he notes, acknowledging the drastic changes in the landscape of cargo shipping.
High-profile brands, including Lululemon and Lacoste, have reported significant thefts from their distribution centers. In one case, Lacoste merchandise worth approximately $1 million was stolen, prompting the company to enhance its security measures in response to the rising trend of cargo crime.
These incidents are prompting shifts in consumer behavior. As retailers grapple with inventory shortages, they may not be able to fulfill customer demands as quickly, leading to potential frustration among consumers. Ellen Kapiloff, Lacoste’s operations vice president for North and Central America, explains, “If a sought-after item is stolen, we may need to relocate available stock to manage supply effectively.”
To counter the growing threat, shipping companies are investing heavily in advanced security technologies. Additionally, authorities are working to strengthen regulations, with pending legislation aimed at combating organized cargo theft. The Combating Organized Retail Crime Act, introduced in April by Rep. David Valadao in California, proposes a federal coordination center to tackle such crimes effectively.
Meanwhile, the Federal Motor Carrier Safety Administration (FMCSA) is enhancing its security protocols to combat impersonation risks. A spokesperson mentioned that the agency is developing a more secure registration system to better safeguard against fraudulent activities.
As these organized crime tactics evolve, the industry is urged to remain vigilant. The collaborative efforts of law enforcement, regulatory bodies, and private companies could be critical in turning the tide against this escalating threat to the supply chain.