Why the Point of Pickup Matters
Cargo spends most of its time in a warehouse or trailer, and only a few moments actually changing hands. This exchange of custody is quickly becoming the lynchpin of many cargo theft schemes.
There’s an old saying that lane changes are where the most accidents happen. Like most old sayings, it should be taken with a grain of salt.
While lane changes do increase the likelihood of an accident, with The Insurance Center citing them in their Trucking Toolbox Talks as a major source of risk, they don’t represent the majority of accidents.
The reason is simple: you spend most of your time in your own lane. You might only move out of your lane briefly, but when you do, it’s more likely that something happens outside of your control.
Cargo is the same way. It spends most of its time in a warehouse or on a trailer, and only a few brief moments in between actually changing hands. But that moment is critical. In that moment you’re more vulnerable to risk, to something happening outside of your control.
This exchange of custody is quickly becoming the lynchpin of many sophisticated strategic cargo theft schemes.
The Weak Link
While strategic theft doesn’t make up the majority of cargo theft in the US, MunichRE cites strategic theft as a particular problem for the US. This theft doesn’t start at the point of pickup, but it almost all passes through it.
Whether it’s a double-brokered carrier taking possession of freight meant for another entity or a bad actor impersonating a driver, they need to physically pick the freight up from the shipper in order to facilitate their theft.
These types of strategic theft are enabled by the security practices most businesses have adopted. For a long time, freight has been a high-trust industry where a handshake and a good name were enough to do business. The result of this environment is a security mindset of "trust first, verify later."
Unfortunately, this makes it easy for criminals to slip in under the radar. Whether they use a stolen name or buy someone else's good name to facilitate their fraud, oftentimes that name and a pickup number are all they need to take possession of millions of dollars of cargo.
How It Affects Us
Shippers
When a bad actor is able to take possession of a load from one of your warehouses, it does more than just damage your reputation; it makes you a target for future theft. Many of these criminals operate in networks, and once they see an opportunity, they waste little time in spreading the word.
This could mean that, by the time you realize one theft has happened, another might already be in progress. Reworking security systems takes time, and neither your customers nor the criminals will wait around for us to figure out how to keep our cargo secure. Until your new security SOP is established, the changes being made to your workflow will present further opportunity for criminals to find a way in.
Carriers
The high-trust freight industry isn't gone, it's just changed. Trust and reputation still play a key part in succeeding in the modern freight world. All it takes it one bad actor to undermine both.
We've all heard the stories of criminals showing up to the point of pickup with stapled-on logos and stenciled VINs. That alone should raise red flags, but many carriers operate in such a way that these things are commonplace. If your company is one of these, you're particularly vulnerable to impersonation. And once that seed of doubt is planted, it's much harder to uproot.
Brokers
While you're not necessarily as liable as you once were, cargo theft affects more than your pocketbook. Strategic theft, particularly theft facilitated by double-brokering, is going to reflect on the broker no matter where the legal liability lies. Optics are everything in the eyes of the market, and maintaining those optics will become even more important as we enter an age where documentation becomes the norm instead of the exception.
What to Do Next
The ruling in the Montgomery decision was clear: you must have some sort of process in place to mitigate this theft. It doesn't have to be perfect, but it has to exist.
Start with what you have. Whether that's one check-in desk and a single set of eyes or a full-blown security system, document how your pickup process works. As you fill out your SOP, document any gaps you find. Times when your desk isn't manned, or loads which get picked up without any further verification.
If you want to stay at the forefront of freight security, stay tuned for OnSight's upcoming Point of Pickup Security SOP Guide! Reach out to us if you have any questions about protecting your business and your cargo.