Freight fraud costing US "$100B a year", warns trade body after Christmas lobster heist
The FBI is searching for thieves who made off with $400,000 worth of lobster destined for Christmas dinner tables in the US.
Multiple truckloads of lobsters were on their way to Costco stores in Illinois and Minnesota, but never arrived.
The freight was brokered by Indiana-based firm Rexing Companies. Its CEO suspects the shellfish was stolen by an organised crime ring.
Rexing Companies’ CEO Dylan Rexing said this is the first time it has been hit by a cargo theft, which is a growing problem across the USA, now estimated to cost $100 Billion each year, and rising fast.
In a TV interview to shed light on the issue, Mr Rexing explained: "We believe this shipment was probably gone within the first 12 to 24 hours of it going missing.
"Our good guess tells us it ended up in New York City somewhere. This particular product was picking up in Massachusetts, and New York City is not very far. There’s plenty of different seafood markets.
"Frankly, the lobster’s gone. We’ll have to take the internal loss. We’ll get through that.
"It’s huge for a small- to mid-sized company based here in Indiana. It’s the lack of paying our folks a Christmas bonus, or hiring an extra person. $400,000 is a lot of people we can hire, so it’s a little heartbreaking. We have over 100 employees, so it’s a large pill to swallow for us."
He said it not only affects the companies in the supply chain, but also the consumer, who in the end will have to make up the cost of what has been lost.
"It really adds to the inflation issues for the products and services that we’re buying around the country," he said. "When you go to the grocery store, you’re going to pay higher prices for the items that you normally buy. So it’s affecting everyone."
The hijacking is part of a long-running problem, now growing "huge", he added. "It’s been an ongoing issue for 10 to 12 years, but it’s really picked up in the last several years," he said.
"We go to trade shows and different associations, and this is a known problem. It never happened to our business.
"I was talking to our attorney. He was telling me that there were nine truckloads of products stolen in five days, over $250,000 in value.
"The police department mentioned to me that there was another load 10 days prior, a load of crab, stolen from the exact same facility in Massachusetts.
"I can’t explain how big of a problem this is. As of recently, the number I’d throw out there is a 1,500% increase year over year.
"Our company is a member of the Transportation Intermediaries Association. It’s a trade association that governs our industry.
"Our association estimates it’s over $100 billion a year. We also believe that only 10% of cargo theft is actually reported. So it’s a much larger problem."
The FBI is investigating the case. "It’s pretty safe to say that this is a theft ring of some sort," he said. "I’m not so sure that it’s necessarily an inside job, at least inside our office, or inside the shipping location where it’s shipped from.
“This theft wasn’t random. It followed a pattern we’re seeing more and more, where criminals impersonate legitimate carriers using spoofed emails and burner phones to hijack high-value freight while it’s in transit.
"These guys are really sophisticated. They’re faking commercial driver’s licenses. They’re changing the names inside of trucks. They’re changing domain names and email addresses.
"These folks are out there looking for your products that you buy in the store. And they’re looking for easy targets, higher value goods, easily moved. And we need our government organisations to do more.
"We need to have physical addresses: no PO boxes. There’s an address out west that I think 400 or 500 different trucking companies are all located in one PO box. That’s not humanly possible.
"We’ve definitely heightened our awareness, and we’ve changed some processes and procedures inside our office to make sure it doesn’t happen again.
"But these criminals are good. This isn’t a mom and pop shop that is doing this. This is organised crime."
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