Webinar Replay #99: Fraud Resulting in Cargo Theft

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Steve Kessler: Good afternoon, everyone. Welcome to the INFINITI Fast Forward webinar series.

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Steve Kessler: I appreciate y’all taking a little time out of your day to join us today.

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Steve Kessler: My name’s Steve Kessler, and I’m going to be the host for the program.

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Steve Kessler: We have…

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Steve Kessler: A very important topic to talk about today. I don’t know how much y’all pay attention to trucking industry news, but I see practically daily some articles or information being put out about cargo theft.

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Steve Kessler: So, the focus of our program today is going to be about fraud that results in cargo theft. So, this is a little bit more sophisticated than somebody busting open the back of a trailer and stealing a couple of boxes out.

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Steve Kessler: Read the other day, the average loss with this kind of cargo theft is around $200,000.

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Steve Kessler: So, it’s a very, expensive proposition. So, we’ve got, Robert Bornstein from the National Insurance Crime Bureau that’s going to give us some information today. I also want to introduce Mark Rhea.

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Steve Kessler: Mark’s my co-host. Marks joined us on most of the programs, spent his life in the transportation industry at the executive level, certified director of safety, and does a lot of consulting work for trucking and fleets around the country.

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Steve Kessler: A little bit of a housekeeping bit here before we get started. Everybody that’s joined us is muted, so we can’t hear you.

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Steve Kessler: So, if you would like to make a comment or ask a question, you can use the little chat box down at the bottom of your… of the screen there, and type in your question or comment.

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Steve Kessler: Also, there’s a Q&A box there, so if you choose to type a question in there, that’s fine too. And we’ll see those here on our side. So, …

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Steve Kessler: Let me introduce our guest today. Joining us today is Robert Bornstein. Robert joined the National Insurance Crime Bureau in November of 2024 after completing 34 years of public service.

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Steve Kessler: At NICB, he serves as the program director overseeing the Life, Disability, Cargo, and Catastrophe programs.

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Steve Kessler: He started his federal career with the Environmental Protection Agency in 1989, working in its Superfund program, and later as a special agent in its Criminal Investigation Division.

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Steve Kessler: In 1996, Robert joined the FBI and served as a special agent in its Oklahoma City, San Diego, and New Haven field offices.

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Steve Kessler: In 2012, Robert accepted a promotion as a supervisory special agent and unit chief at FBI headquarters in Washington, D.C.

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Steve Kessler: In 2016, he obtained a field supervisory Special Agent position at the Washington, D.C. Field Office, overseeing its Child Exploitation and Human Trafficking Task Force.

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Steve Kessler: In 2019, until retirement, Robert served as an assistant special agent in charge.

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Steve Kessler: at the Washington field office, overseeing its Violent Crime Branch.

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Steve Kessler: After retiring, he joined the D.C. Office of the Inspector General Medicaid Fraud Control Unit as a criminal investigator and supervisory criminal investigator.

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Steve Kessler: So, Robert, very happy to have you join us, so I’m going to turn it over to you, sir.

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Robert Bornstein: Thank you so much, and I greatly appreciate being here, and I thank everyone for attending.

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Robert Bornstein: So, today we’re going to talk about fraud resulting in cargo theft.

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Robert Bornstein: And the significant impact it’s having on the transportation cycle.

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Robert Bornstein: As you know, this has been in the news lately. Recently, Congress has identified this matter as being,

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Robert Bornstein: a threat to our national security and economic security, because it’s directly impacting the supply chain. And most recently, our CEO at the National Insurance Crime Bureau, Dave Glawe, testified before the Senate Judiciary Committee

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Robert Bornstein: on proposed legislation, that is currently being debated in the Judiciary Committee, called, CORCA, the Combating Organized Retail Crime Act.

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Robert Bornstein: And why we need CORCA is that cargo theft over the last several years,

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Robert Bornstein: especially during and after the COVID pandemic, has really increased significantly across the country. And we’re not talking about just one or two types of commodities. We’re talking about anything that has value that could be sold on the black market.

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Robert Bornstein: And what’s interesting is a lot of the cargo that is stolen is immediately being rerouted to our ports across the nation and then shipped overseas.

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Robert Bornstein: So, you have a lot of sophisticated criminal enterprises basically taking advantage of our…

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Robert Bornstein: Our supply chain processes, which have always been based almost solely on a trusting type of relationship.

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Robert Bornstein: I have a quick video here that kind of summarizes what we’re going to discuss more, but I’ll get more granular on how this is happening, what steps the industry can take to try to, …

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Robert Bornstein: prevent or deter thefts, and we’ll go from there. So let me play this video, which recently appeared on NewsNation.

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Robert Bornstein: What if you can create your own website by saying, this is what I want? With Wix, you can.

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Robert Bornstein: In 2021, we had 5 cargo thefts reported.

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Robert Bornstein: In 2024, we had 876 cargo thefts reported. We’re talking about hundreds of thousands of dollars stolen in incidents across the United States with no resolution.

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Robert Bornstein: A crisis over cargo theft making it to Capitol Hill. The Senate is holding a hearing addressing an increase in thieves targeting trains and trucks, stealing everything from electronics

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Robert Bornstein: to food. I don’t know if you heard about this story, but just last month, more than a million dollars’ worth of Nintendo Switch devices were stolen from a truck in Colorado.

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Robert Bornstein: The heist? Now a $35 billion problem per year, with freight trains cleared out in a matter of minutes. This video from Los Angeles shows the aftermath of thieves looting cargo containers, leaving only shredded boxes behind.

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Robert Bornstein: I’m now joined by Chris Spear, President and CEO of American Trucking Associations. Chris, as always, I appreciate your time on the show.

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Robert Bornstein: I mean, these crimes appear to be skyrocketing. The American Trucking Association sharing that strategic theft has risen 1,500% since 2021. I mean, what and who is behind all this?

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Robert Bornstein: Well, these are… these are not just, your grab-and-run type criminals, and that does exist, but we’re seeing activity now originate from Eastern Europe, from Russia. These transnational organizations are hacking into our systems.

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Robert Bornstein: redirecting, freight while it’s in motion. The driver thinks it’s the company telling him where to drop.

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Robert Bornstein: That freight is long gone.

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Robert Bornstein: Before law enforcement could even be notified. So, this is a $35 billion a year, hit to the industry, as well as the economy and supply chain. So.

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Robert Bornstein: There are a lot of modes, like trucking, that are involved in this effort, and really bringing the awareness to Congress, which is now really engaged. They’re listening, they understand it’s a problem, and now we’re trying to really put forward legislation that would fix the problem at the federal, state, and local level.

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Robert Bornstein: Talk to me more about that $35 billion a year price tag, Chris, because what are the biggest concerns with this if the trend continues? Is it jamming up the supply chain? Higher costs are getting passed on to the consumer? What are you most worried about?

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Robert Bornstein: Certainly, the latter. Obviously, insurance costs for my members that are carrying the freight, which is about 72% of our domestic freight in the United States.

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Robert Bornstein: But that $35 billion is really reflected in the prices we ultimately pay for the things that we need and want. So, things like milk, eggs, bread, fuel, but also pharmaceuticals, electronics, as you noted earlier. Everything that we’re paying for now, it’s that widespread, is going to have a cost to it because of this criminal activity. We need to be going after the bad guys, not just here in the

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Robert Bornstein: domestic arena, but also abroad, and that’s going to take federal capabilities.

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Robert Bornstein: well beyond anything that we could harden in our companies. We need the federal leadership to coordinate that activity at the state and local government, work with our industry to really go after these criminals and lower prices that we consumers pay. Yeah, and it’s just wild to see some of this video. I mean, this aerial footage of all, you know, the debris, the aftermath of the looting. You say these operations are becoming more and more sophisticated. These are now

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Robert Bornstein: like, highly organized crime rings doing this.

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Robert Bornstein: Where are these crooks taking all this loot for selling, and how difficult has it been to track their movements after the fact?

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Robert Bornstein: Well, you showed yesterday’s hearing in the Senate, and that was our witness. We’re grateful for that. That testimony really painted a landscape for the Senate Judiciary Committee, that focuses on a whole host of activities, where these products end up going. There are several companies, or countries

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Robert Bornstein: I would say that ban energy drinks. Energy drinks are a high-value target. They end up getting stolen and then shipped overseas, illegally sold in those countries that ban those drinks. So, this activity is widespread. It impacts all products.

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Robert Bornstein: In our country. But some of the more sophisticated activity we’re seeing, when you get into the bill of laden, when you start targeting the most high-value targets, you can see that, go after it, redirect it.

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Robert Bornstein: These are activities that are really having a direct impact on the supply chain and the prices we pay, but I also believe it’s going to take on a national security risk if we don’t have that federal leadership, so I’m very grateful

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Robert Bornstein: For the Republican-led House and Senate and this administration for taking a hard look at this, we need to be getting tough on crime, and this is a good place to spend our time and energy. Yeah, well, it’s scary, it’s also maddening, for companies and trucking associations across the country. Chris Spear, I always appreciate your time and expertise, sir. Thank you.

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Robert Bornstein: Thank you for watching.

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Robert Bornstein: Then Doug.

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Robert Bornstein: Are you here for Tracy? We’re here for everyone. Lemu and I help people save hundreds by customizing car insurance with Liberty Mutual. We ordered a limo, not a Lemu. Oh, yeah.

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Robert Bornstein: We do that too.

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Robert Bornstein: At your service. Only pay for what you need. Sorry about that. So, as you can see, this is a $35 billion impact on our economy, and

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Robert Bornstein: you know, the video highlighted several points. First, I want to explain the terminology. The industry typically uses, the term straight theft, meaning

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Robert Bornstein: You know, a robbery or burglary type of incident in which, pillaging is done, you know, either,

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Robert Bornstein: by one individual or gangs. Those types of incidences, that are straight thefts or straight pilfering, straight robberies.

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Robert Bornstein: are called straight thefts. What we’re looking at here is strategic thefts, which are basically initiated through some type of fraud scheme. And these are more sophisticated.

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Robert Bornstein: And… and what’s happening is…

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Robert Bornstein: These fraudsters are using, synthetic identities, or identity theft of your DOT numbers, your identity, your companies, your, …

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Robert Bornstein: Information, to basically infiltrate the system, and allow

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Robert Bornstein: Loads of freight to be given over to them, rather than legitimate transporters.

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Robert Bornstein: …

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Robert Bornstein: that’s one area. There’s also where they infiltrate not only the transportation network, but they infiltrate the actual, end, purchaser of the materials, too. So, there is a…

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Robert Bornstein: a very sophisticated scheme that NICB’s working with, federal law enforcement in right now, where a company,

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Robert Bornstein: Basically, had a large number of… of high-tech, generators.

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Robert Bornstein: And they’ve done business in the past with a large, beverage company. And …

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Robert Bornstein: They thought they were getting into a contract with one of these large national beverage companies to sell them 12 of these generators.

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Robert Bornstein: And, what happened next was… the, …

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Robert Bornstein: Culprits, contacted a freight broker.

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Robert Bornstein: to arrange for the transportation of these generators, basically to New York City. They were coming from the Midwest, in Kansas, and they selected a location in the Bronx for them to be delivered.

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Robert Bornstein: So, this is very sophisticated, as you can see. They deceived the actual supplier of the product.

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Robert Bornstein: They deceived the freight broker, who then hired legitimate transportation companies to pick up the load, and then the load was driven to a location in which the

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Robert Bornstein: criminal enterprise was able to quickly offload it and then export it, through the port of Newark and other East Coast ports. So, you can see how

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Robert Bornstein: How clever, these schemes are.

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Robert Bornstein: And it’s… it’s impacting the industry. And it’s not only just electronics, as mentioned in that video, it’s anything that has a value. So, it’s interesting… it’s interesting to see

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Robert Bornstein: … how, … …

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Robert Bornstein: you know, the commodities that are being stolen every day. It ranges from food products to beverages, anything that you could offload into the black market is at risk. And these schemes are dramatically increasing the cost of doing business across America.

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Robert Bornstein: CargoNet, which is a self, you know, a service that industry can report cargo theft crimes to.

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Robert Bornstein: Lists the top commodities that are being stolen these days as food and beverages, household goods, but we also have more recently seen a dramatic increase in the amount of metals

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Robert Bornstein: being stolen. Commercial metals, such as copper. Copper theft has increased dramatically over the last year or two.

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Robert Bornstein: And also, what we’re seeing, currently, which is no surprise, is an increase of meat being stolen. And we’re talking tractor trailers.

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Robert Bornstein: full of beef being stolen and rerouted. And so, obviously, these thieves, using these types of schemes, already have,

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Robert Bornstein: purchasers or venues to offload these cargoes, because they’re not going to refrigerate it for a long period of time. They obviously are going to have vendors that are willing to accept the stolen products lined up, even before they initiate their crime.

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Robert Bornstein: So, what are some of the…

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Robert Bornstein: ways, or how can we identify some of these fraud schemes in advance? And technology is being utilized to deceive the freight brokers, the suppliers, and the end warehouses. A lot of times.

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Robert Bornstein: they’re being deceived using voice over IP, or internet protocol types of devices.

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Robert Bornstein: You know, communication between the trucker, the brokers, dispatch, is vital, as you know. And, most people now communicate through cellular technology, a cell phone.

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Robert Bornstein: There are applications, however, that you could download onto your smartphone that will mimic a cell phone, and these are voice-over internet protocol types of programs. TextNow is a good example of one of these applications.

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Robert Bornstein: And the reason why fraudsters, and others like to utilize those types of devices is they don’t lead the same type of cookie crumbs or leads that traditional cell phones leave if you’re committing crime.

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Robert Bornstein: … For example, most of the carriers using cellular service still, keep a record of…

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Robert Bornstein: what they call detailed records of who you initiated a call to, or who you received a call to. These are considered business records, amongst the cellular companies. And they also keep track of the cell sites in which those calls are routed through.

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Robert Bornstein: And this is to help them, increase or maximize their, ability to cover the United States.

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Robert Bornstein: To set up new towers, to service their community.

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Robert Bornstein: But as you know, law enforcement can utilize information associated with the call detail records and the cell site locations to geolocate individuals or cargo, etc.

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Robert Bornstein: while voice over internet protocols, you don’t have those types of records that are produced. And in fact, a lot of these applications, once they’re loaded onto your phone, if you don’t want to, have it been on the phone anymore, you simply delete it.

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Robert Bornstein: And what these applications allow you to do is basically pick a number within any area code. And so, if I was a freight broker, let’s, say, working out of Irving, Texas, or Dallas, Texas, and I was only dealing with local transporters.

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Robert Bornstein: I could mimic being a local transporter with an area code associated with Irving, Texas, by selecting that, and then when it shows up on caller ID, it looks like I’m in the local area, or at least have a phone tied to that local area.

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Robert Bornstein: So, you can see how that could be deceitful or deceiving, to others.

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Robert Bornstein: The other thing that these fraudsters are doing, quite successfully, too, is using phishing or other type of business email compromises.

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Robert Bornstein: So, you know, again, we must be very cautious of what you’re clicking on links, as a business owner or operator. You need to screen your emails to ensure that they’re appropriate, and you’re not giving out

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Robert Bornstein: Information on links that you’re not, aware or are reputable.

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Robert Bornstein: Because all that information that you give out, such as your DOT number, your address, your phone number, driver’s license, insurance information, all can be utilized by these criminal enterprises to build up a profile

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Robert Bornstein: thinking that it’s you, but they’re, taking over your identity, and then utilizing that identity to acquire loads through, broker boards, or acquire business through, the supply chain. So, we have to be very cautious and very,

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Robert Bornstein: Set up security, so we’re not leaking out our private information that could be used to,

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Robert Bornstein: Lead to identity theft type of situations.

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Robert Bornstein: You know, one of the things that, you can do, or can do, associated with getting phone calls, or if you are part of that screening process, you could go commercially available or even free online,

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Robert Bornstein: Carrier identification, type of software or programs that will identify where a phone number is

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Robert Bornstein: is part of. As you know, if you change cellular service, you could often port your number to a different carrier. Well, there is services that keep track of all those

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Robert Bornstein: numbers, and so these services then can identify

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Robert Bornstein: you know, which carrier a number is tied to. And so here we have a career, this is part of that investigation.

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Robert Bornstein: in which it was an Atlanta-based number, that was utilized to communicate to the freight broker, you know, the truck driver calling the freight broker.

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Robert Bornstein: it received a 404 number. But when we investigate where that 404 number is, it really is not a T-Mobile phone, it’s not a Verizon phone, it’s not your traditional phone where now we could go back and, as law enforcement, trace

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Robert Bornstein: and get clues of trying to identify this perpetrator. It comes out to a bandwidth company, which is basically text now.

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Robert Bornstein: So, there are some tools that more advanced law enforcement can utilize to try to peel back the onion to expose who might have

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Robert Bornstein: utilize that, that device, but it’s a lot more difficult. And that’s where CORCA, this federal legislation, will come into play, and we’ll get into that in a moment.

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Robert Bornstein: But you could see how difficult it is. Once the fraudsters begin their operation, and a theft is recognized, who do you report it to?

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Robert Bornstein: You know, we’re talking about items that are in transport, or in the supply chain.

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Robert Bornstein: you know, who are we reporting the theft to? Do we report it to our local law enforcement agency that basically is just going to take a police report and doesn’t really have the investigative skills or ability to really track or try to intercept or recover the loads?

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Robert Bornstein: So, this is a major problem. But obviously, we do need a police report, filed somewhere for us to begin the insurance claim process. So yes, obviously, a police report needs to be filed within the jurisdiction in which the

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Robert Bornstein: theft has occurred. But you can see now, it is very difficult for that local law enforcement agency to take further steps to try to identify and arrest these very sophisticated criminal enterprises.

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Robert Bornstein: And there are some states that have very active cargo theft task forces, such as California. The CHP out in California does have regionalized cargo theft task forces

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Robert Bornstein: That can then take information from the locals and work their cases up a little further.

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Robert Bornstein: But again, that’s in California. If the load is then transported outside of California, yeah, the CHP could notify the various other state police agencies, but again, it’s very difficult then to build and prosecute multi-jurisdictional cases.

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Robert Bornstein: Which leads to…

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Robert Bornstein: the federal solution. You know, the FBI and Department of Homeland Security, Homeland Security Investigations, are poised to work on these types of enterprise investigations.

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Robert Bornstein: However, it’s going to be very challenging for them, too, because they have limited resources, limited abilities to work all these cases, so they have to sort of pick and choose which are the more viable cases for them to bring to the United States Attorney’s Office.

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Robert Bornstein: But again, what CORCA, this federal legislation that is being contemplated.

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Robert Bornstein: We’ll set up an intelligence center.

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Robert Bornstein: To hopefully connect the dots, because if we go back and we look at that 404 number, or we look at the business email compromise and the domain that the culprits use, and if we could then connect the dots on multi…

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Robert Bornstein: Thefts and multi-schemes, we might be able to identify or at least concentrate on the worst of the worst of these criminal enterprises that are engaged in these cargo thefts.

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Robert Bornstein: And you’d be surprised, again, we know there’s investigations going on right now where large-scale amounts of cookies

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Robert Bornstein: are being stolen and shipped overseas, because again, these cookies’ value is increased

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Robert Bornstein: in Eastern Europe. For some reason, they enjoy a lot of the Oreos, not saying that they shouldn’t enjoy Orioles and other types of domestic American cookies, but they do have a higher sale in Eastern Europe.

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Robert Bornstein: And some of those proceeds, that we believe this criminal enterprise is usually utilizing is going to supply or going towards.

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Robert Bornstein: other more nefarious types of activities, regional wars, etc. We all know from the days of the ISIS events in the Middle East, where criminal enterprises were smuggling cigarettes.

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Robert Bornstein: And, causing a black market of cigarettes, and using those proceeds to support terrorist organizations overseas. So, this is a major…

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Robert Bornstein: source of revenue for, not only for enterprises to get rich, but also to impact national security. So, what can we do to prevent

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Robert Bornstein: Cargo theft within our industry, the transportation and the trucking industry.

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Robert Bornstein: Well, one is we need to screen every employee. We need to do security checks and background checks on all our employees to ensure that we have situational security amongst the cargo. We must treat all cargo.

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Robert Bornstein: It doesn’t have to necessarily be a quote-unquote high-value cargo, because again, they’re taking everything, anything that has value. So, any road should have security arrangements to ensure its integrity.

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Robert Bornstein: We need to train employees on signs of cargo sale.

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Robert Bornstein: provide security training. Know your situational awareness. And it’s not only… these strategic thefts, yes, they’re committed by fraud, and they’re a little more sophisticated, and you may not have, surveillance or counter surveillance, but they are getting information

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Robert Bornstein: doing their homework on knowing what to target. So, there is surveillance going on by these criminal enterprises of the warehouses, of your trucking fleets, where you normally park, etc. What type of locks may be on

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Robert Bornstein: your vehicles, where security cameras are. So again, security and tracking awareness. There’s been many examples where these criminal enterprises are very patient. They’ll do surveillance for days at these large warehouses.

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Robert Bornstein: seeing the routes and the timing of when trucks enter and exit. So, security needs to be aware of their surroundings.

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Robert Bornstein: And… and then also not being distracted when you are in an area of waiting to be unloaded.

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Robert Bornstein: are you talking to a real security personnel, or is that person just pretending to be the security personnel? So, we need to be, have that 360 awareness. And if there’s

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Robert Bornstein: problems or concerns, they should be relayed to the dispatch. …

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Robert Bornstein: Or the contract holder, so they could vet if this is legit or not.

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Robert Bornstein: Again, check transportation partners before hiring. Ensure that they have the same type of standards.

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Robert Bornstein: again, be curious… cautious and scrutinize emails to ensure that they are legitimate and not altered. You’re doing this every day after work, when you go home. I’m sure you have private email addresses, and you’re getting spammed by everybody.

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Robert Bornstein: You know, is that your bank asking you for your social security number and PIN number? You know, these schemes, I really feel bad for my mother, who’s, you know, just turned 84.

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Robert Bornstein: And… and all this… …

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Robert Bornstein: Noise being sent over through email of schemes, fraud schemes, and they’re… they’re attacking the transportation industry just as much as they’re attacking you at home, trying to acquire information.

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Robert Bornstein: So, then also scrutinize and ensure phone numbers, used by individuals in the supply chain are valid. And if someone’s using VoIP, not saying that all VoIP users

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Robert Bornstein: are criminals but at least try to ensure that it is the person that you are talking to, if they are using a VoIP type of device.

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Robert Bornstein: You may question why you’re using VoIP, but ensure that it is somebody that you’re familiar with, because it does appear that people that are utilizing some of these

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Robert Bornstein: Applications have nefarious, intentions.

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Robert Bornstein: Implement in-transit security measures, pre-planned, where you’re stopping, you know, route planning, etc. You know, avoid hotspots that are known for frequent cargo crimes. You know, there is some,

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Robert Bornstein: tools out there now of secure locations for resting. I know there’s reviews and security alerts regarding various interstate truck stops, things like that. And that goes back to keeping a diligent eye

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Robert Bornstein: Trucks and cargo are most vulnerable when sitting idle. Watch for those counter surveillance. If you feel you’re, you know, here starting to stand up, it’s most likely there is a problem, and you need to be cognizant of it and notify others.

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Robert Bornstein: Of what you believe might be occurring.

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Robert Bornstein: Take advantage of technology. Obviously, utilize layers of security, ensure the perimeter entrances, building doors, windows are well lit, and install alarm surveillance systems.

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Robert Bornstein: vehicle tracking. You know, a lot of… I was just talking to Steel Dynamics, a great company that’s,

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Robert Bornstein: Is a large steel,

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Robert Bornstein: Manufacture and recycling operation, and they were having problems with copper thefts.

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Robert Bornstein: And their security department, decided to really do a deep dive and evaluate what steps they could take to try to avoid being victims of this cargo theft surge. And there, protocols that they’ve implemented

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Robert Bornstein: to include putting in various tracking devices, through their vetting systems of the transporters and brokers. They’ve been able to reduce the number of thefts impacting their company quite considerably. So, you know, kudos to them.

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Robert Bornstein: Conduct audits, regularly look for gaps in shipment protection, and stay abreast of the best technologies.

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Robert Bornstein: And then, other types of common sense, ways to avoid becoming a victim.

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Robert Bornstein: I think one of the best things is going right now within the industry

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Robert Bornstein: is, we have some great industry leaders. Travelers, which have a very extensive inland marine, insurance policies, Scott Cornell, who’s really been in the forefront

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Robert Bornstein: of this cargo theft epidemic, also is on the chair of the board of the Transported Asset Protection Association, TAPA.

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Robert Bornstein: And TAPA has been… researching, developing, and promulgating, various,

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Robert Bornstein: Standards, that, across the whole industry.

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Robert Bornstein: that really provide good recommendations to try to avoid being victims of cargo theft. So, it’s not only regarding the transporters, but they also have sections of standards regarding the transporters, they have sections of standards regarding brokers, they have standards of

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Robert Bornstein: of, …

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Robert Bornstein: protocols that shippers can take, and warehouses. So, you know, I do recommend you all investigate TAPA, and what they’re doing there to try to get

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Robert Bornstein: Design and implement, methodologies and protocols to avoid becoming a victim.

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Robert Bornstein: And what NICB does is serve as a liaison between the insurance industry and law enforcement. So, we work hand-in-hand with our insurance partners, and then we have a host of law enforcement contacts

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Robert Bornstein: And so, we all tried to work together

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Robert Bornstein: To try to, again, connect those dots

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Robert Bornstein: to try to identify those criminal enterprises that are engaged in these types of thefts. So, you can see it’s very challenging. They’re happening every day, every moment.

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Robert Bornstein: And hopefully, with more coordinated federal resources put into this through, again, this legislation, that there could be,

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Robert Bornstein: better cooperation amongst local, state, and federal agencies in combating cargo theft. But obviously, you know, in conclusion.

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Robert Bornstein: One of the biggest things that we within the industry and on all aspects of the supply chain need to be cognizant of is that prevention education is the best,

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Robert Bornstein: way to go, because once the items are stolen, it is very, very difficult, as you can see from what I’ve been talking about, for law enforcement to, readily,

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Robert Bornstein: Investigate, identify, and arrest these perpetrators.

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Robert Bornstein: And then hopefully, as the federal government and federal agencies get more involved, the penalties would be increased associated with these types of thefts. Because that’s the other issue here, is you have local law enforcement that may get the report, and they consider these more of a property crime.

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Robert Bornstein: And therefore, you know, it’s going to take a…

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Robert Bornstein: A less priority than a crime of violence to them.

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Robert Bornstein: So, again…

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Robert Bornstein: However, these criminal enterprises certainly engage in not only property crime, but also in other crimes to include acts of violence. It’s going to need to be a concerted effort between local, state, and federal agencies.

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Robert Bornstein: And again, this slide here just demonstrates some of the resources that NICB is providing for our,

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Robert Bornstein: insurance partners. We produce intelligence reports. Recently we produced a cargo threat assessment, a nationwide threat assessment. We also produce more,

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Robert Bornstein: quick intelligence reports. We produced one regarding the use of VoIP. We are publishing one, or we have published one, another, trend that we’re seeing within the industry is thefts.

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Robert Bornstein: using strategic thefts on high-end autos. A lot of these high-end auto auctions are being infiltrated also, where, you know, a vendor

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Robert Bornstein: believed he purchased a BMW, requests the BMW to be transported from, let’s say, New York to California, and again.

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Robert Bornstein: scrupulous actors are intercepting that transport, transportation arrangement and redirecting it. That’s another point that I should stress 100%.

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Robert Bornstein: is, as drivers, as operators, you know, there should be an arrangement where, obviously, if you’re going from point A to point B, and then somebody or somebody else

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Robert Bornstein: or an unknown person is directing you to go to point C, you know, you need to be

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Robert Bornstein: You need to contact somebody to validate the legitimacy of that rerouting.

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Robert Bornstein: And that was one of the steps that Steel Dynamics took, is their drivers are not authorized to reroute unless specific protocols are undertaken.

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Robert Bornstein: And they’re assured that the new location is legitimate.

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Robert Bornstein: So, I think that…

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Robert Bornstein: I might conclude what my primary points were, and I’ll take any questions from anybody regarding what I’ve discussed.

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Steve Kessler: Robert, this is Steve. There’s a couple of questions and comments here, and I think they’re important to

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Steve Kessler: present here. Salem has written that it’s not just railroad containers, but high-value loads are being targeted as soon as the cargo leaves. They follow until the truck stops at gas stations and they break in.

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Steve Kessler: We use heavy-duty locks and regular locks, but it doesn’t matter. Thieves travel with their equipment to cut open any lock.

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Steve Kessler: How do we even know the trucks and trailers… how do they even know which ones to hit? Could it be an inside job, like someone from the shipper tipping them off?

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Robert Bornstein: Exactly on all those points. And in fact, I was just, we had a presentation recently

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Robert Bornstein: from the California Highway Patrol.

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Robert Bornstein: … And, they had video of

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Robert Bornstein: three vehicles that were basically staking out a large warehouse, provider. And so, again, their timing, or their… they also have contacts at the airport, so a lot of these electronics were coming in through the airport, then being loaded on trucks.

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Robert Bornstein: The trucks then would go to warehouses. They had surveillance of all that.

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Robert Bornstein: And again, we must watch and do almost counter-surveillance or at least be cognizant of the surveillance. So yes, …

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Robert Bornstein: These organizations are very sophisticated, they’re very patient, and exactly what whoever wrote that question is occurring. I don’t know the solution.

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Robert Bornstein: You know, we’ve tried various locks, and depending on the sophistication of the criminals, on what tools they’re bringing, and, you know, a lock is only going to be as good as

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Robert Bornstein: as how long it could withhold or withstand penetration from a device. So, it may be buying you some time, but it’s not going to be 100%, foolproof.

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Steve Kessler: Here’s another comment, and …

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Steve Kessler: Paul has written, I’ve had a trailer picked up with the correct 12-digit billed lading number, and it was later determined that the driver somehow had the correct number but stole the load. It never showed up.

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Steve Kessler: So… Yeah.

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Robert Bornstein: And that could be… that could be a couple of… a couple of things there, too. You could have the driver going off track on his own, or it could have been a strategic theft where the driver, although if he didn’t… if he can’t contact the driver, it probably is the driver that, …

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Robert Bornstein: as part of the criminal enterprise. You know, that were, again, a lot of…

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Robert Bornstein: personal identification security is… is going to be necessary, and I know it’s… it’s a burden to some extent, where, you know, truck drivers need to present their ID,

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Robert Bornstein: you know, you don’t want that in someone else’s file either, like, oh, I want to take a copy of your driver’s license. So, there are, you know, those types of concerns, but that’s where the industry’s coming to, where, you know, the vetting process must be done.

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Robert Bornstein: As I said, there’s no difference between a load of beef.

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Robert Bornstein: To some extent, and a load of cash.

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Robert Bornstein: and we know, you know, Wells Fargo or, you know, Brinks Security, you know what an armored car looks like, and their officers that are driving those armored cars. Well, we need to start looking at

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Robert Bornstein: All our commodities in the same security light as that, armor car, almost.

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Steve Kessler: Fantastic. Real quick, folks, I’m going to pop up a little, poll question here.

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Steve Kessler: …

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Steve Kessler: You know, I think it was mentioned, Robert mentioned, that training’s going to be important, so if you need to train all your employees, if you’ve got

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Steve Kessler: your drivers, or you have some protocols that you have regarding security of your freight, probably a good time to sort of rethink that. We’ve got a nice system to help you get that sort of information out and document that the… your employees have seen it.

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Steve Kessler: Also, reminding any of you out there that are certified directors of safety under the NATME program, we’ll provide

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Steve Kessler: We’ll provide you with a certificate so you can claim those credits.

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Steve Kessler: So, while y’all are, active on the poll there, Karen has asked, how often have you discovered thefts that are inside jobs from the shipper?

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Robert Bornstein: There is, you know, that’s a great question. There is that also, there’s no question about that.

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Robert Bornstein: So occasionally, you know, corporate security or, can track that down. …

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Robert Bornstein: Where, you know, inside… it’s an inside job. So that does… does occur still, and those are very difficult also to rectify to some extent. But the largest thing, like I say, the growing

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Robert Bornstein: trend is where these…

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Robert Bornstein: criminal enterprises, I could be sitting in Eastern Europe, and I could basically identify a load I want.

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Robert Bornstein: and utilizing a computer and these fraud schemes, I could deceive

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Robert Bornstein: the owner of the materials, the broker, and the trucking industry itself, and get that material to a port and overseas, and still sit in my desk in

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Robert Bornstein: Eastern Europe.

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Robert Bornstein: Those are the most challenging ones, and those are the ones that are occurring more often, and impacting large, volume of our commerce.

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Steve Kessler: All right, I don’t see any other questions. Mark, did you have any comments about the….

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Mark Rhea: Yeah, absolutely. That’s… this is a real issue that’s out in our industry, and if there’s ever a good use of producing your own custom content, because we… Robert, our clients have everything from

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Mark Rhea: Frozen beef too, cargo, oils to HAZMAT.

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Mark Rhea: That, to auto transporters that you…

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Mark Rhea: Design and develop your own custom content.

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Mark Rhea: And I’m sure a lot of them are saying, well, where would I start? If that’s the question, would you be a source, or TAPA, or CORCA? Where would I start if I wanted to produce some custom content for my drivers on what to look for, and what to do, and what not to do to prevent cargo theft?

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Robert Bornstein: Well, again, I refer the transporters themselves to TAPA, the American Transportation, Trucking Association, and other, associations, the Security Councils.

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Robert Bornstein: That, cargo security councils that are across the country, they have great resources, they have great conferences,

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Robert Bornstein: Education and awareness, which you guys are sponsoring, is vital, because there are many that are just not aware of these types of situations. Again, we’re talking about an industry that’s been based on trust.

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Robert Bornstein: And unfortunately, trust is being, you know, violated daily by these,

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Robert Bornstein: unscrupulous individuals. So not only do we have to worry about the straight theft, you know, the burglaries, the robberies, the pilfering, but now we must worry about the sophisticated, type of enterprises engaged in these types of events.

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Steve Kessler: Yeah, I think, you know, companies are going to have to… I agree with you, Mark, and you too, Robert. Companies are going to have to develop some kind of role-specific

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Steve Kessler: protocols that they need to train their employees on. I love the quote, freight at risk is freight at risk.

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Steve Kessler: And so, I think there’s a lot of opportunities here to provide training that could at least make people

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Steve Kessler: More aware, kind of keep your eyes and ears open a little bit more, pay a little bit more attention to…

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Steve Kessler: phone numbers, and who’s sending emails and messages and all that, because it’s easy to get duped into these things here quick. One real quick question here from, from Karen.

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Steve Kessler: How do I get involved with this arena from your side, per se? Just curious. I find this topic very interesting and would like to learn more.

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Robert Bornstein: Well, we have more literature on our website, nicb.org, …

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Robert Bornstein: But you feel free to give me a call, or, you know, like I say, it is a national, problem,

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Robert Bornstein: anything to get involved in… in, trying to resolve it is certainly admirable now. It’s… it’s rampant. Every day, if you get, cargo net, reports.

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Robert Bornstein: It could be anything from eggs to, …

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Robert Bornstein: sneakers, to any type of commodity that all of you people out there are hauling, which is, within the supply chain, are being stolen left and right. And the reason why is a lot of materials, as you know, don’t have serial numbers, they’re untraceable, and so if there’s a black market.

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Robert Bornstein: Ability to offload it, they’re going to offload it.

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Robert Bornstein: Nope.

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Steve Kessler: Yeah, and I would, tell everybody, I think, you know, the National Insurance Crime Bureau organization, I think if you can support what they’re doing, you’re doing some of your part to help try to solve this problem. They work hard to try to figure out how we can stop this.

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Steve Kessler: And so, I would reach out to NICB, and they have a lot of resources there for you, and I think they can certainly help. One last question popped up. Isn’t blind shipment becoming more scammed nowadays?

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Steve Kessler: I’m not sure I know what blind shipment means.

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Steve Kessler: Do you have any idea, Robert?

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Robert Bornstein: No, I haven’t heard that terminology, but …

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Robert Bornstein: Maybe he could clarify that.

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Mark Rhea: Yeah, my experience with blind shipments would be a truckload of poultry, and you load it at a

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Mark Rhea: Poultry processor, and he says,

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Mark Rhea: head to California, I’ll tell you where to go. I’m going to sell this load in transit, so….

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Steve Kessler: Okay.

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Robert Bornstein: Yeah, that would be risky. Again, I think it… I think you really must be solidified that you’re going to go from point A to point B, and that everyone is aware of your route and where you’re going. The rerouting issue or, you know, double brokering has been an issue where, you know, one…

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Robert Bornstein: transporter will say, I’m going to take the load, but then I sub-broker it to another. These are all…

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Robert Bornstein: Areas of risk.

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Robert Bornstein: The supplier should know who the broker is, the broker should know who the transporters are. There should be strict protocols that that load is going from A to B without going to C.

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Robert Bornstein: And if it is going to be seen, there should be some red flags being raised. And that goes back to that transporter.

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Robert Bornstein: Even though they were using legit transportation from the warehouse in Kansas to the Bronx and New York, when that driver was told, hey, our warehouse is kind of busy right now, why don’t you just offload these right here on the street?

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Robert Bornstein: That should have been a clue, or can be a clue, that something nefarious is going on. And I think that’s where I know it is,

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Robert Bornstein: It takes,

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Robert Bornstein: bravery, or it’s, you know, you must do the right thing. You know, if you’re… again, that hair is rising, I must be honest, this does not look legitimate and report it to the appropriate authorities.

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Steve Kessler: I agree, totally.

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Steve Kessler: Mark, any other comments? I don’t see any other questions. Robert, that was fantastic information, sir. I really do appreciate you joining us today. I think we may have opened some eyes today as to how serious this problem really is, and how easily we can be

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Steve Kessler: You know, have huge losses because of this. Here’s one last question. How carriers…

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Steve Kessler: How can carriers motivate brokers to verify dispatcher and driver information with the main phone number on FMCSA before booking loads? That’s a good point.

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Steve Kessler: You know, verify the information before you, book loads.

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Robert Bornstein: Definitely.

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Steve Kessler: A little more due diligence would make sense.

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Robert Bornstein: Due diligence is very important. There are, commercially available vetting

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Robert Bornstein: agencies out there nowadays that will do deep-dive research into the DOT numbers, phone numbers, drivers’ identifications.

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Steve Kessler: Yeah.

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Robert Bornstein: Again, we’re going from a system of trust to now a system of verify and trust.

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Steve Kessler: Yeah.

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Steve Kessler: Absolutely.

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Steve Kessler: Very good, sir. Well, we’re just about out of time anyway, so, Robert, once again, thank you. Mark, thanks for joining, and all y’all out there. I thought this was fantastic information, and we’ll make sure that

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Steve Kessler: We’ll send out an email with the recording, a link to the recording, so you can share that with people that weren’t able to join us live today.

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Steve Kessler: Once again, Robert, thank you, sir, appreciate it. And we hope that, y’all can support Robert’s organization, and join us for the next webinar. So, thank y’all very much. Thank you, Robert.

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Robert Bornstein: Thank you, sir.