Cargo theft in the U.S. has surged to critical levels for both small and large businesses, with losses per incident up 67% from the previous year and projected to rise by another 35% in 2024, primarily affecting small to medium-sized businesses and consumers with increased costs. Frank Matarazzo, CEO of Fusion Transport, outlines a series of proactive measures being implemented by his company to counteract this criminal trend, including enhanced vetting and real-time cargo tracking technologies. The thefts, often linked to organized crime, are particularly prevalent near warehouses and in states like California, Texas, Georgia, and Illinois, leading to operational disruptions and higher insurance premiums industry-wide.
Millions of dollars worth of cargo, especially from small retail businesses, are not reaching their final destinations in the U.S. due to a sharp rise in organized thefts that began at the outset of the COVID-19 pandemic and continues to rise. The average loss per cargo theft last year represents a 67% increase over the average of $351,556 in 2022, with that volume expected to increase another 35% in 2024. Frank Matarazzo, CEO of Fusion Transport, aims to shed light on the insidious nature of cargo theft rings, targeting unsuspecting shippers and brokers with sophisticated tactics while outlining the proactive measures Fusion Transport is implementing to combat this growing trend. "We must prioritize the security of our supply chains and take proactive measures to safeguard against theft," stated Matarazzo. "By implementing rigorous vetting procedures and leveraging technology to monitor cargo in real-time, we can mitigate the risk of theft and protect businesses from substantial losses."
Strategic cargo theft—when fraudsters use stolen motor carrier operating authorities or logistics broker identities to obtain freight and misdirect it from the intended receiver—is at an all-time high. Thieves use methods including identity theft, fictitious pickups, and double brokering scams to steal cargo, with some of the top targets being food and beverage, electronics, and household goods. Especially for smaller businesses, the losses sustained from these thefts threaten the livelihood of the company and increase operational costs to prevent further occurrences.
According to CargoNet, a company specializing in cargo theft prevention:
• Nearly $130 million worth of goods were reported stolen in 2023, with the actual figure likely higher due to underreporting
• Most cargo thefts occur near warehouses, distribution centers, and unsecured parking lots
• Thieves are not only stealing full truckloads but also targeting smaller amounts of cargo and individual items from trucks
• Common targets are valuable loads that can easily be sold on the secondary market
• Cargo theft has become part of organized crime rings
• Hotspots include California, Texas, Georgia, and Illinois
The Costs of Cargo Theft to Businesses and Consumers
There is a disproportionate impact of cargo theft on small businesses, culminating in a financial burden that a company may not be able to overcome as well as operational disruptions faced by brokers and small warehouses that have experienced theft. Trucking companies that experience cargo theft will likely be held liable for the loss and have to pay for the stolen product, with insurance often not covering the entire loss because of the policy deductible and limits of coverage. Reporting such losses often results in higher insurance premiums as insurance companies are experiencing unprecedented losses.
For the consumer, this can lead to higher prices. Trucking companies may have to raise rates for future shipments to cover losses incurred through out-of-pocket expenses or by paying higher insurance premiums, resulting in additional costs that frequently get passed on to consumers.
Martarazzo points out that an additional unknown cost related to cargo theft is the lost “chain of custody.” Many consumer-packaged goods have specific “chain of custody” or quality control requirements that need to be followed. When products are stolen and sold on the black market, the chain of custody and quality control aspect of handling the product is lost, leading to less-than-perfect customer satisfaction or increased health risks that are impossible to measure.
Fusion Transports Proactive Approach to Protecting Freight from Cargo Theft
Fusion Transport has managed to stand out in the world of freight by leveraging a unique approach to logistics:
• Operate proprietary less-than-truckload consolidation networks
• Designed and implemented a three-step carrier vetting process
• Designed a network of company-owned and partner warehouses as a forward delivery network
• Designed a custom cargo quality program
• Implemented cargo GPS tracking solution within network
Matarazzo and Fusion Transport have implemented proactive measures to combat this growing threat. He emphasizes the critical need for stringent vetting processes when selecting carriers to move cargo, highlighting the importance of thoroughly researching the background and history of potential partners. "Many of these carriers lack a substantial track record and have limited assets, making them hard to vet. It’s critical to have the ability to accurately check their credentials, providing the best protection against risk,” he states. “Furthermore, many of these small trucking companies are becoming the victims or unassuming accomplices in theft. It's imperative for businesses to conduct thorough due diligence before entrusting their cargo to any carrier." He stresses the need to begin the process at the ground level, looking for red flags, and, before handing over a load, asking basic questions to determine if everything checks out.
Fusion Transport also employs a multi-faceted approach to mitigate the risk of cargo theft, which includes comprehensive vetting procedures, on-the-ground inspections of carriers and equipment, and GPS tracking of freight to monitor its whereabouts in real time.
Along with these concrete approaches, Fusion Transport, under its CEO and Owner, Frank Matarazzo, has decidedly altered the approach to shipping issues by taking personal responsibility and actively collaborating with clients on solutions. “I expect the Fusion team to go above and beyond the root cause issues and improve our business,” he states. “When we experienced receiving discrepancies with retail customer shipments, we reviewed our internal processes first, then called Walmart, scheduled visits, watched the receiving process – how freight comes off the truck, how it’s received, how it is run through the conveyor system, and what happens when it fails – and we found several opportunities for improvement that we then worked through with the customer to improve. We want to create more ownership in the process, from beginning to end.”
Fusion Transport remains committed to enhancing security measures and collaborating with industry stakeholders to address the escalating threat of cargo theft. For more information about Fusion Transport and its comprehensive logistics solutions, visit Fusion Transport.
