The Supply Side: Cargo theft to rise 25% in 2025; $35 billion lost in supply chain

Cargo theft is a costly problem for the retail and supply chain industries. In 2024, incident rates hit an all-time high. Industry leaders estimate cargo theft will rise 25% from a year ago.

“In my 25 years in the supply chain, I’ve never seen cargo theft this prevalent,” Robert Howell, chief supply chain officer at Academy Sports and Outdoors, said during a recent U.S. Senate Committee hearing.

Broker fraud, shipment interception, and other forms of cargo theft cost supply chains up to $35 billion annually, according to data from the Homeland Security Investigations agency.

Will Johnson, chief special agent at BNSF Railway Police Department, said during the Senate hearing that cargo theft contributes to higher consumer costs and threatens some carriers’ livelihoods.

The American Trucking Associations reports that small trucking companies are hit with some of the biggest fraud cases, and trucking freight fraud has become too commonplace. ATA said that repeat offenders commit much of the crime, and only one in 10 results in an arrest.

Howell said the types of thefts seen by Academy Sports and Outdoors include load interception, identity theft, double brokering and cyber fraud. Crime has advanced from stealing a truckload or duplicating a Department of Transportation motor carrier number to cyber theft of online credentials and systems, he said.

“Recently, we had a shipment we call private label swimwear. It was intercepted on its way from Nevada to our Texas distribution center. As you can imagine, this is critical this time of year for the season. Unfortunately, we had to react when that load was stolen and repurpose and reposition product throughout our network,” Howell said.

He said the cargo theft resulted in additional costs to Academy, shipment delays, and impacts on third-party service providers, brokers and carriers. An estimated 65,000 thefts occurred in 2024, which was about a 40% increase over the prior year, according to Johnson. He said the increase could be attributed to a lack of jurisdictional coordination.

“Cargo theft cases often cross multiple state lines, making jurisdictional coordination, prosecution and data collection extremely difficult,” Johnson said. “A lack of a coordinated federal cargo theft enforcement effort also hinders effective prosecution.”

Johnson urged Congress to consider multiple action items as a starting point to find effective solutions. Johnson’s suggestions include the establishment of a federal supply chain crime coordination center and supply chain fraud and theft task force to address cargo theft in all aspects of the supply chain.

He also supports direct funding to dedicated federal prosecutors to tackle cargo theft cases. He advocates for modernizing the Federal Motor Carrier Safety vetting process to include better authentication methods that include more controls around the sale or transfer of data. The industry is also seeking stiffer penalties for cargo theft perpetrators.

A new report from data firm Overhaul found cargo theft slowed in January but is expected to rise. The report found that 39% of cargo thefts in January occurred between Monday and Tuesday, a departure from the more typical end-of-week trends. While theft levels were mostly consistent through January, they did increase the last week of the month.

“This rising trend is expected to continue with a gradual increase in cargo theft incidents week over week,” Overhaul reported.

Southern California accounts for 32% of cargo theft cases, followed by Texas at 19%, Memphis at 14% and 9% in Pennsylvania, Overhaul reports. The primary types of theft included full truckload thefts and pilferage while shipments were left unattended at warehouses, secure parking places, truck stops and company yards. A few incidents of last-mile courier theft and deceptive pickups were recorded during the month.

Danny Ramon, director of intelligence at Overhaul, said the continued increase in cargo theft volume indicates that criminals continue to hone their craft, and there is an increased number of thieves involved in cargo theft.

“These folks are getting better at what they do. Folks in white-collar and blue-collar America are not the only ones who re-careered during the pandemic; criminals did it, too. A lot of them found cargo theft as their new ‘career,’ and they’ve been focusing their efforts and getting better,” he said.

Fashion and apparel cargo isn’t as heavily impacted by at-large cargo theft as its counterparts are. While clothing and shoes accounted for 9% of total items grabbed by cargo thieves, nearly one-quarter of all thefts targeted electronics, Overhaul noted.

Ramon said rail theft is a burgeoning concern the industry needs to watch. While Overhaul’s report shows that just less than 10% of thefts took place on railroads or in train yards, Ramon said those types of instances are underreported and often privately handled.

Regardless of the type of theft, Ramon said companies shipping cargo around the country should be vigilant and build a network of professionals who can guide them through any cargo theft-related snafus.

“Having the proper contacts and networks of cargo theft-specific law enforcement contacts is probably the number one thing behind getting plugged in and knowing what the supply chain security landscape is in your supply chain,” he said.

Francisco Batista, transportation manager at Burns & Wilcox, said awareness of the surge in cargo thefts is an important first step. The thefts are not only costly financially but can also threaten lives.

“I do not see these statistics going in the other direction sharply any time soon,” Batista said. “All you can do is try to improve your protocols, reduce the risk and be aware if what you are hauling is in high demand.”

Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics, and is sponsored by HRG.