Cargo theft continues to be a growing problem in Canada. The financial impacts of cargo theft ripple all the way to the end consumer, while the harm it causes within the supply chain industry is not only financial, but also physical. Recognized as a low risk, high reward crime, cargo theft is often connected to organized crime networks who use the proceeds to fund other criminal activities, such as the trafficking of drugs and guns.

While the physical theft of goods is a well-known issue within the industry, strategic cargo theft presents a more complex threat. When stealing cargo, criminals target consumer products that are in high demand and they can turnover quickly. Driven by technological advancements, cargo thieves are continuously developing new methods to defraud the supply chain and acquire cargo loads. Équité Association, through our National Cargo Theft and Recovery program, collaborates with our members, law enforcement, the retail sector, and the transportation industry to identify and recover stolen cargo and mitigate these crimes. As part of our commitment to fraud prevention, we are highlighting some of the most common types of cargo fraud to be aware of as these crimes have far reaching impacts from the product manufacturer to the carrier, to the insurer, and ultimately to the end user.

A common tactic in cargo theft is the use of identity theft and fraudulent documentation to deceive and exploit the supply chain. Some key methods include:

Fictitious Pick-up

Criminals acquire information about a load’s legitimate carrier, as well as the pick-up time, and location. They then pose as the legitimate carrier and pick up the load from the originating distribution centre using various tactics, such as forged paperwork or replicated uniforms and company logos on tractors and trailers. The actual carrier arrives to find the load already stolen, unaware of the identity theft by someone using their carrier identity.

Double Brokering

This tactic involves criminals either assuming the identity of a legitimate carrier or creating a completely fictitious carrier profile. Using this fraudulent profile, the criminals secure the load through an online broker or calling a shipper directly. They will and then “re-broker” the load to an unsuspecting legitimate carrier for delivery to the location specified by the criminals. The legitimate carrier will fulfill the delivery without knowing that the load has been stolen.  This process may be repeated multiple times, making the crime more difficult to detect and investigate.

Altering the Bill of Lading

A load is picked up and diverted to an alternate location by the bad actor, where a portion of the cargo is removed. They manipulate the paperwork, including recreating the bill of lading (BOL), changing the quantity of product to conceal the theft. They then fulfill the delivery to the destination where the receiver, relying on the altered paperwork, accepts and signs for the reduced quantity. The shortage often remains undetected for weeks, until discrepancies arise during the payment reconciliation process.

Équité maintains Canada’s only comprehensive cargo theft database, tracking the theft and recovery of stolen trucks, trailers, cargo, and heavy equipment. We are dedicated to assisting our member property and casualty insurers and collaborating with law enforcement across Canada in identifying, predicting, and preventing these types of cargo fraud. By staying informed and vigilant, businesses can significantly contribute to safeguarding their assets and fostering a more secure logistics and supply chain environment.

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