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Cargo crime in North America down in Q3, but losses are mounting

Organised criminal networks are increasingly exploiting identity fraud, carrier impersonation and weaknesses in freight verification, driving cargo theft losses across Canada and the US up 39% year on year, despite a sharp decline in reported incidents Verisk CargoNet recorded 2,072 of reported supply chain crime incidents across the countries through to 23 October, marking a 25% decrease in total numbers from the 2,755 recorded during the comparable period in 2025. VP operations at Verisk CargoNet Keith Lewis told The Loadstar: "But while the number of incidents declined, the financial impact moved in the opposite direction, losses increasing 39% to $718.9m." Furthermore, he noted that the average documented value of stolen goods had also registered a massive surge, 72% year on year, from approximately $261,000 to more than $448,000. Over the third quarter, CargoNet recorded 547 incidents, approximately 33% fewer than a year earlier, but estimated losses still reached $230.1m, with California accounting for the largest share, with 182 incidents, followed by New Jersey, Texas, and Illinois. "The data shows why fewer reported incidents should not necessarily be interpreted as lower cargo theft risk. Losses associated with these events are becoming increasingly significant," Mr Lewis added. Among the biggest concerns are fictitious pickups, where criminals impersonate legitimate carriers to collect and divert shipments, with CargoNet recording 138 such incidents in Q3, compared with 147 over the same period of 2025. Mr Lewis continued: "Criminals are looking for ways to exploit identity, communications, and shipment-verification processes to pose as legitimate participants in the supply chain." He noted these efforts tended to involve schemes making use of compromised business email accounts, internet-based phone systems, and transport-industry applications. On a commodity basis, food and beverages was the most frequently targeted category in Q3, accounting for 94 incidents, followed by metals (63), household goods (49), and electronics (46), while warehouses and distribution centres accounted for 197 reported incidents. Chair of TAPA Americas Scott Cornell told The Loadstar: "Cargo theft has fundamentally changed in the US over the last six years. We have seen massive increases in the overall cargo theft numbers and values, and, in particular, a significant rise in strategic cargo theft." He estimated strategic theft, involving deception rather than straightforward physical stealing, had risen 10-fold this decade, up from less than 3% of all cargo theft before 2020 to roughly 30% or more. While he stressed the majority of incidents involved conventional physical theft, Mr Cornell said: "Bad actors are using technology such as AI to become increasingly sophisticated and globalised, running these schemes from anywhere in the world." One emerging technique, the "Trojan Driver Scam", involves criminals infiltrating legitimate, vetted trucking companies, highlighting the limitations of verification systems concentrating on checking carriers rather than individual drivers. Consequently, Mr Cornell said: "Thorough background checks and carrier- and driver-level vetting need to be standard due diligence." Indeed, the Airforwarders' Association (AfA) is calling on US lawmakers to strengthen federal response by incorporating the Combating Organised Retail Crime Act (CORCA) into the final fiscal year 2027 National Defense Authorization Act. AfA CEO Steve Smith said: "Forwarders are dealing with organised networks across state lines, exploiting gaps between jurisdictions. Republicans and Democrats should continue working together to give law enforcement and businesses the tools to root them out." The legislation, which passed the House of Representatives, would establish an Organised Retail and Supply Chain Crime Coordination Centre and improve intelligence sharing between federal, state, and local law enforcement, and private sector organisations. Mr Smith told The Loadstar: "It would help investigators connect related incidents across jurisdictions. A fraudulent pickup in one state and a stripped trailer in another may involve the same network, but fragmented information can make connection harder to identify." Furthermore, it also includes provisions to aggregate theft values over a 12-month period for certain federal stolen property offences, alongside expanded money laundering provisions and criminal forfeiture measures. AfA members have reported criminals buying established federal motor carrier registrations from struggling hauliers for $25,000-$35,000, with Mr Smith noting that this allows them to exploit years of apparently clean operating history. "Two extra minutes up front can save you two months of difficulty on the back end," Mr Cornell said, urging forwarders and trucking companies to strengthen verification procedures, train frontline employees and check drivers' identities before releasing shipments.

Tougher rules for US imports on DDP put pressure on buyers and suppliers

US companies buying goods on Delivered Duty Paid (DDP) terms have been urged to examine who is responsible for their customs declarations, after US Customs and Border Protection (CBP) introduced new requirements for foreign importers of record (IORs). The interim final rule, published in the Federal Register last week takes effect on 5 January, with new conditions for foreign IORs making both formal and informal entries into the US, as well as additional verification responsibilities for licensed customs brokers. Under the rule, a foreign IOR validated under the Customs-Trade Partnership Against Terrorism (CTPAT) programme can make entries itself, or appoint a licensed customs broker that does not have to be CTPAT-validated. A foreign IOR without CTPAT must designate a broker that is both licensed and CTPAT-validated to make the entry or act as IOR. Where the foreign party is not the owner or purchaser of the goods, the designated broker must act as the importer of record. However, the rule also establishes stricter criteria for determining whether a business qualifies as a US IOR. An individual must be a US citizen or lawful permanent resident, while a company must be organised under US law, located in the country, and at least 51% of its beneficial owners must be US citizens or permanent residents who control the business, or who directly own a significant amount of unencumbered US real estate. Licensed customs brokers will have to verify a client's eligibility before declaring it to be a US IOR. They must request and review supporting records, which could include corporate documents, financial statements, and proof of citizenship or permanent residence. Verification records must then be retained for five years. The development follows CargoTrans's recent tariff webinar, which examined the risks associated with DDP arrangements, noted that in theory an overseas supplier typically arranging import clearance and paying duties and taxes, offered the US buyer a seemingly simpler route to receiving goods. But CargoTrans co-CEO Nunzio De Filippis said the new rule made that convenience harder to achieve, adding: "So that easy button that we spoke about just got harder to press." He advised buyers to establish exactly who is responsible for the import process when their overseas supplier sells on DDP terms. "You have to ask them who is the importer record, who is the customs broker, what does that arrangement look like, and does it meet the new requirements?" he said. "Welcome to the age of strengthening customs enforcement," he added. CBP explained the measures were intended to improve visibility of foreign importers, strengthen accountability, and help ensure duties are collected. The agency highlighted difficulties pursuing unpaid duties and enforcing customs requirements against foreign entities with few US assets. Brokers may request delayed compliance with the new verification requirements before 5 January, but all must be fully compliant by 6 May next year. Comments on the interim final rule are due by 5 January. For US buyers, the update means a DDP quotation alone is no guarantee that the underlying import arrangements meet the new requirements. Buyers should establish who is named as the IOR, which broker is filing the entry, and whether the relevant parties satisfy CBPconditions.

Shippers pay the price as supply problems trigger costly airfreight fixes

Even as forwarders and shippers lock in air cargo capacity, production setbacks and unreliable ocean services are still forcing manufacturers to pay heavily for emergency lift to meet customer deadlines. Recent earnings disclosures from Rico Auto Industries, Netgear, and Logitech show how quickly supply problems translate into additional airfreight costs - squeezing margins and leaving companies seeking to recover the bill from customers or suppliers. Shippers preparing next year's freight tenders still face the risk of costly last-minute shipments, even if overall airfreight rates fall. Rico Auto, in last week's earnings call, disclosed a ₹400m ($4.3m) airfreight bill after longer ocean journeys and difficulties launching new components left it struggling to build sufficient inventory for programmes serving BMW and Toyota. Chairman and CEO Arvind Kapur said US-bound shipments that normally took five to six weeks were taking 10-11 weeks, sometimes stretching to 12. "We could not stop the lines of the customer," he said. "We paid a very heavy price." Rico increased production to supply customers by air, while simultaneously rebuilding its ocean pipeline and warehouse stocks. Problems were concentrated in new iron components, whose weight compounded the cost of flying them. But management acknowledged that disruption was only part of the explanation. "Could we have done better? Yes, we could. We should have been more agile," said Mr Kapur. The company looked for contributions towards the additional airfreight expenditure, with one customer already having agreed to participate. It did not identify the customer or disclose the amount. Rico expected the emergency air shipments to cease after this month, as ocean deliveries replenished stocks. The alternative can be more expensive still. Siemens' True Cost of Downtime 2024 report put the cost of an hour's unplanned downtime at a large automotive plant at $2.3m. Chapman Freeborn's Isidro Nuñez Oñate said last month that urgent freight requests could stem from planning errors, defective components, or transport disruption. "Car plants run like clockwork, so it takes very little to throw everything off," he said. "If the truck delivering parts for step four breaks down, or every windscreen needed for step ten turns out to be defective, the cars cannot move forward. Suddenly, the whole plant is at a standstill, with costs continuing to rise for every hour production remains inactive."" Netgear, meanwhile, said a poorly executed factory transition by a manufacturing partner had constrained supplies of enterprise switches and some consumer routers. During the company's 4 November earnings call, CEO CJ Prober identified increased airfreight use among the factors behind a sequential decline in enterprise margins - however, those margins remained higher year on year. The company was also discussing "appropriate commercial remedies" with the manufacturer, and transferring some products to other suppliers, although it did not specify whether that would cover the freight costs. Netgear's experience also demonstrates the limits of buying faster transport: its CFO said planned airfreight spending had been lower than anticipated because the expected production ramp failed to materialise. The company forecast around 150 basis points of consolidated gross-margin pressure in Q4, primarily from rising memory costs and transportation associated with production recovery. For Logitech, the deadline is the Christmas sales window. Its October earnings call included an allowance for 30-40 basis points of gross margin pressure from premium expedited airfreight in the December quarter to mitigate supply disruption and ensure products were available for holiday demand. Commercial Vehicle Group also reported premium freight and overtime costs as production volumes increased, while recovering higher freight, commodity, and tariff costs from customers continued to lag the expenditure. The emergency premium reflects how much capacity is committed before an urgent shipment reaches the market. As DSV's Achim Martinka explained at TIACA's Air Cargo Forum in Miami: "Usually, our contracts are already signed for six or 12 months with the airlines. So everything which comes on a spontaneous, ad hoc basis will be even more expensive than the base load already on the aircraft." For shippers preparing their own tenders, buying longer-term protection also carries a cost. "Forwarders can, of course, offer shippers 12-month deals, but given the market conditions, they would have to bake-in so much uncertainty the price becomes uncompetitive," said Xeneta's Niall van de Wouw. JTD Advisory founder David Kerr argues that buyers should focus on securing capacity and examining fuel surcharge terms alongside the headline rate. In his latest advisory, he urges buyers to "buy capacity, not rate", and to "write fuel clauses against jet, not crude", warning that falling crude prices may not translate into lower jet fuel costs. Xeneta's baseline is for airfreight rates to decline overall in 2027. It also expects some cargo that switched to air for reliability, rather than speed, to return to ocean once shipping schedules improve sustainably, most likely from the second quarter. But that recovery remains conditional. Ocean schedule reliability from the Far East to North Europe was still around 10% in October, according to Xeneta. For manufacturers facing immediate customer commitments, potentially cheaper freight next year offers little protection against the cost of recovering a missed deadline now.