The cargo theft that worries investigators most in Canada now involves no break-in, no stolen truck, and no thief ever laying hands on the freight. It is carried out from behind a computer, using a legitimate company's stolen identity, according to Daniel Kerr (pictured right), cargo and heavy equipment theft program coordinator at Équité Association.
Kerr said the shift has been underway since the pandemic. Before COVID, theft meant someone physically taking a trailer from a yard or truck stop.
"Prior to COVID, your typical theft was your straight theft," he said. "Since COVID, with the isolation and people not having contact with each other, everyone went online, and everything [started getting] done over the computer. That's when the trend shifted more toward your strategic theft, your identity thefts and your frauds, and it keeps on increasing over the years.”
The most common version begins with a stolen identity, Kerr said. A bad actor takes over the credentials of a real freight carrier and uses them to win a contract under false pretenses. The targets are often chosen because they carry built-in credibility — often a long-established carrier. "They already have the reputation built," Kerr said.
The aim, he said, is simple: "to get the contract for a load under false pretenses using the company's name they've stolen."
From there, the load is moved through a scheme known as double brokering. The practice itself is not necessarily criminal, Kerr said: a carrier that cannot move a load may legitimately broker it to another carrier. The fraud lies in how the bad actor exploits the same mechanism.
Sid Kingma (pictured left), director of investigations for Western Canada at Équité, said the scheme exploits the ordinary way freight is matched to carriers. "If I have a load of freight and I want to move it from point A to point B, it gets put on these boards, and then the different freight companies bid on it," Kingma said. The buyer usually takes the best price, then is expected to vet whoever wins the bid.
The stolen identity defeats that check. "When they steal the credentials of a legitimate company, that makes it a little bit harder to spot because they appear to have a good reputation," Kingma said. "And if I'm in a rush to get this out, which can often happen, then maybe enough due diligence isn't done."
Once the bad actor holds the contract and the legitimate paperwork, the load is put back out to a second, genuine carrier that has no idea anything is wrong. "That company then has all the legitimate paperwork, so it gets picked up, everything looks above board," Kingma said. The bad actor then introduces a small change in the delivery instructions, redirecting the load from its intended destination to a new one. "And of course that's a location that the bad actor has chosen, and the load gets dropped off there," Kingma said.
The only carrier ever to physically handle the freight, then, is an unwitting one. "So the thief actually does not have any hands on the load itself," Kerr said. That carrier is frequently left unpaid.
These cases are far harder to work than a stolen trailer, Kerr said, because the offender may never come within thousands of kilometres of the freight. "Those types of frauds are more difficult to investigate," he said. "It's a paper trail to follow and trying to identify that bad actor when all they're doing is potentially sitting behind a computer."
For the real company whose name was used, the damage outlasts the lost load. "Meanwhile, the legitimate company is still trying to run a business, with its name and reputation harmed in the process,” Kerr said.
