Opinion: Why Yard Cargo Theft Is Exploding (It's Not Bolt Cutters)

Many supply chain and warehouse operators still think cargo theft starts with a pair of bolt cutters. That image is mostly wrong, and this persistent belief is costing the industry millions every year. We’re fighting against a technique of freight fraud that doesn’t really exist anymore.

The FBI has said that impersonation now accounts for the majority of freight theft in this country. Not smash-and-grab or a guy with a mask and bolt cutters. It’s usually a truck showing up at the gate with the right paperwork, the right MC number, a driver who looks legitimate, but none of it is real. We need to reorient the way we think about fraud. We are no longer fighting a physical heist, we are fighting a highly sophisticated digital operation.

I've spent 30 years building technology for transportation, warehousing and the yard, and the reason this vector is winning isn't mysterious. The yard is where it all intersects; it’s the point of where the physical part of operations happens (e.g. load pick ups, the gate opens).

Welcome, fraudsters

System one is operations: getting the driver through the gate, keeping track of the driver while on site, and understanding their purpose and validating them. System two is security: cameras, a perimeter, and a guard checking a license against a clipboard. For most of the industry's history, these two systems operated with different budgets, owners and software, or oftentimes, no software on the security side at all.

Walk into a typical gate house today and you'll still find a person manually writing down that a driver checked in. That record lives in one place, while the operational system that's actually running the yard (e.g. dock assignments, appointments, dwell time), lives in another. There is no technical reason for that separation to still exist, but what I call “the seam,” is still there, and fraudsters are exploiting it. The first, and bare minimum step of defending your yard, is digitizing all of the manual steps.

These aren’t even the smartest fraudsters out there; they’re exploiting the seams between these two systems. We’re practically welcoming them in. I constantly remind customers that  a fraudulent carrier doesn't need to be sophisticated when the person checking them in has no way to cross-reference the driver, the appointment, and the load in real time. The seam does the work for them.

The cost of being reactive

Traditional yard security is reactive almost by definition. Something goes missing, and only then does anyone pull the footage: what did the truck look like, what was the plate, what was the trailer ID. The yard only starts fraud mitigation after the cargo loss has occurred.

Tie the same data to the operational event instead, and the entire posture flips. Was this driver actually matched to this power unit, this load, this authorization, before the gate opened? This is what we need security systems to do; we need them to offer a digital pass that won’t clear a truck that doesn't check out.

The Rodney Dangerfield of Supply Chain

Ask why the yard has lagged the rest of the supply chain on this kind of investment, and the honest answer is that no one has wanted to own it. It sits between over-the-road and the four walls of the warehouse, and neither side has historically claimed it. I've taken to calling it the Rodney Dangerfield of supply chain infrastructure. It gets no respect, when it’s really the linchpin holding everything together.

The instinct, once security becomes a visible problem, is to buy a point solution. If you’re worried about vetting carriers, there’s dedicated carrier-vetting subscriptions out there. You can easily buy cameras. Then there’s certainly a driver-ID app as well. But with every additional unique solution, we’re introducing new seams into the entire system. Every seam is an opening for fraud.

What I hear consistently from operators now, and it's a shift from even two years ago, is exhaustion with exactly this pattern. They don't want a fourth point tool. They want the operational system and the security layer to be the same system.

Relinquish your clipboard

If you manage a facility and you're watching this problem get worse, the fix doesn't start with buying more security software. It starts with getting off the clipboard. Digitization is the precondition for everything else; you can't layer computer vision, automated carrier vetting, or real-time driver verification on top of old processes. Once the yard is digitized, closing the seam between operations and security stops being a second purchase and becomes a natural extension of the system you already have.

The theft numbers aren't going to improve by getting better at investigating losses after the fact. They improve when the decision to let a truck through the gate is made with the same information, in the same system, at the same moment, instead of letting the seams continue to grow.

This opinion column was written by Chris Brumett, Chief Product Officer at Terminal Industries. The views expressed are his own and do not necessarily represent those of The Supply Chainer or its editorial team.