Fraud, Freight, and the Fight to Stop It – w/ Jimmy Menges | Ep 63
In this episode of the Logistics & Leadership Podcast, Brian Hastings sits down with Jimmy Menges—National Director and freight crime investigator—to expose the hidden world of cargo theft and the organized crime rings fueling it.
Jimmy pulls back the curtain on how scammers hijack legitimate operations, the loopholes they exploit, and what really happens in the first 48 hours after a load vanishes. From forged documents to fake drivers, and warehouse accomplices to massive multi-million dollar heists, this episode reveals the high-stakes reality most brokers and carriers aren't prepared for.
Whether you’re a freight broker, a carrier rep, or a shipper trying to protect your freight, this episode is packed with tactical insight, investigative war stories, and hard-won lessons that could save your business.
The Logistics & Leadership Podcast, powered by Veritas Logistics, redefines logistics and personal growth. Hosted by industry veterans and supply chain leaders Brian Hastings and Justin Maines, it shares their journey from humble beginnings to a $50 million company. Discover invaluable lessons in logistics, mental toughness, and embracing the entrepreneurial spirit. The show delves into personal and professional development, routine, and the power of betting on oneself. From inspiring stories to practical insights, this podcast is a must for aspiring entrepreneurs, logistics professionals, and anyone seeking to push limits and achieve success.
Timestamps:
(00:02) – The Nature of the Job
(04:33) – The Landscape of Cargo Theft in California
(09:29) – Freight Brokerage Challenges & Vulnerabilities
(16:20) – How Load Scams Are Investigated
(19:04) – Inside the Warehouse Incident
(26:46) – The Business Impact of Cargo Theft
(34:15) – How to Spot & Fight Industry Scams
(36:01) – Navigating Fraud as a Freight Broker
(41:33) – Reducing Risk in Freight Shipping
Connect with Jimmy Menges:
LinkedIn: https://www.linkedin.com/in/jimmy-menges-4a95a4a6
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Watch the pod on: YouTube
Transcript
You're not dealing with the driver.
Speaker A:You're dealing with a scammer.
Speaker A:This was the part of my job that's definitely the.
Speaker A:The most fun.
Speaker A:It's kind of like what you're picturing where I'm finding a discreet place kind of with binoculars, taking pictures and sitting on it, like, super late at night, like, you know, putting the whole story together.
Speaker B:Welcome back to the Logistics and Leadership Podcast.
Speaker B:I'm your host, Brian Hastings, and with me today, I have lead investigator, national director Jimmy Mingus.
Speaker B:Jimmy, welcome to the show, man.
Speaker A:Yeah, thanks, Brian.
Speaker A:Appreciate you having me on.
Speaker B:No problem.
Speaker B:On today's episode, we're going to talk about freight fraud, theft, different ways to mitigate risk, different ways to take action within the first 48 hours.
Speaker B:And then also, how do we combat this?
Speaker B:You know, some people call it an epidemic, especially with our industry today and who's in cahoots with who and who.
Speaker B:Who's tied to what company.
Speaker B:Just recently, there was a $90 million heist that was uncovered in California.
Speaker B:So how do we combat that?
Speaker B:As freight brokers, as carriers, we don't want to be left on the hook for having to write a check to our customer where we get nothing in return.
Speaker B:Jimmy, I guess tell us, and how'd you get into this stuff, man?
Speaker B:That's a crazy game.
Speaker A:My intro into this world is.
Speaker A:Is very different than, I think, everybody else that I've met.
Speaker A:So I.
Speaker A:I actually come from insurance.
Speaker A:I spent my whole career up until this point in logistics as a logistics underwriter for.
Speaker A:For big commercial, complex logistics companies.
Speaker A:And that's where I was really introduced to the.
Speaker A:To the underground, organized cargo theft world.
Speaker A:And when my clients had had cargo thefts, we would contract and hire out a PI firm.
Speaker A:I really kind of found myself sort of investigating it myself.
Speaker A:Developed more or less a passion and kind of like, became a resource in the company and on the team for cargo theft.
Speaker A:And, you know, got eventually got a pretty unique opportunity to do this full time.
Speaker B:I know that, you know, you're.
Speaker B:You're in the middle of it.
Speaker B:You're the guy that we call, you know, in times of crisis.
Speaker B:So thank you for answering the call.
Speaker B:You know, personally, I've dealt with you a handful of times.
Speaker B:You know, not something that we're proud of, but it's just a nature of the beast sometimes.
Speaker B:And you've.
Speaker B:You've always been extremely responsive.
Speaker B:You know, one of the things I want to hit on today is, you know, how quick you need to take action, especially for, you know, once you find out that you have a load stolen or you have a potential load stolen.
Speaker B:So you've been great with that, man.
Speaker B:You know, it's been, you know, I feel like we hit it off and understanding more and more about kind of the organized, you know, freight fraud ring or, you know what, I think you said it a few minutes ago, organized crime ring within freight.
Speaker B:That is today.
Speaker B:I guess, like, you know, to, to give our listeners more of an understanding, just like a general landscape of kind of where we are today, what you see in the future.
Speaker B:Give us kind of the rundown, man.
Speaker B:What, what do our, what do our listeners need to know?
Speaker A:So where are we today?
Speaker A:Some people say the climax.
Speaker A:I, I don't think we're quite there yet.
Speaker A:I, I'll tell you, like, we're consistently seeing new MOs, new criminal organizations get, get introduced, which only tells me that people are recognizing that this is a good business to be in.
Speaker A:I think if you're in the, the criminal stealing business, cargo theft flies under the radar.
Speaker A:I mean, we're starting to get a little bit more attention to it in the industry.
Speaker A:But yeah, I mean, like, when I, when I got into it, you know, it was pretty much you had the Armenians and the sinks, you know, and you could, you could tell quickly by different fact patterns which crew would probably, you know, probably was leading the initiative.
Speaker A:Whereas now, you know, we have evidence to show us that there, it's, it's not just them.
Speaker A:You know, we're seeing different Hispanic crews get brought into it.
Speaker A:We're seeing just new themes in general, which makes us think, yeah, there's, there's a lot of different new crews involved.
Speaker B:Yeah.
Speaker B:Are there any, like, general parts of the country that are more prevalent than others or any, any places where laws are a little bit looser or what's that like?
Speaker A:So California, it's still.
Speaker A:I mean, there's.
Speaker A:It's like California and the rest of the country.
Speaker A:California.
Speaker A:You know, I would say like almost 90% of what we see either ends up in California or, Or gets stolen out of California.
Speaker B:Is that right?
Speaker A:Yeah.
Speaker B:Holy cow.
Speaker A:I mean, I don't.
Speaker A:I mean, it's, it's.
Speaker A:It is a large amount.
Speaker B:Is that because they have less restrictions or less laws or there's not as much due diligence or what?
Speaker A:Why is it that question all the time?
Speaker A:I think it's a combination.
Speaker A:I think one is like, you know, the Armenians and the.
Speaker A:Things were historically out of California.
Speaker A:You know, that's kind of where they hunkered down and started their, you Know, sort of their nucleus and, you know, and then you combine that with.
Speaker A:Prosecution rates are all time low in California, depending, you know, depending on where in California it gets stolen, like Los Angeles County, It's.
Speaker A:It's tough.
Speaker A:Like, there was a while where they were, you know, these guys were getting glorified tickets.
Speaker A:They're starting to make some changes, and, you know, we're starting to see some prosecutions, but overall, you know, it's.
Speaker A:Unless it's a federal indictment, the reward is much greater than the risk.
Speaker A:Like, even if these guys do get caught, it's been a couple nights in jail.
Speaker B:I could see that they're getting a slap on the wrist for a potential $50,000 payout, or they're getting a slap on the wrist for a couple days or whatever.
Speaker B:Going to jail for a couple days and then getting out and then doing the same thing over again and not really getting punished for what they're doing.
Speaker B:With California, California having such a high prevalence of cargo theft, is that, like, an area that people, you know, like myself, or like a brokerage should stay away from, or is that an area that we need to just do a lot more, you know, vetting of our carriers or.
Speaker B:What do you.
Speaker B:What do you think there, man?
Speaker A:It's a good question.
Speaker A:Honestly, I think you just got to determine, you know, you're a business guy, like, is.
Speaker A:So first of all, you need to continue to screen your.
Speaker A:Your carriers and train your brokers.
Speaker A:You know, we get into that a little bit later.
Speaker A:But don't ever, like, screen higher or screen lower.
Speaker A:If it's in California or out of California, these guys are moving, too.
Speaker A:So I should mention, you know, we're starting to see a very big uptick in the Midwest.
Speaker A:So Indiana, Indianapolis is becoming like a second hub for the Sing Organization.
Speaker B:Yeah, saw that.
Speaker B:I saw that a couple weeks ago.
Speaker A:Yeah, they've been out there for.
Speaker A:For quite a while now, but now.
Speaker A:Now we're really starting to see, like, a very strong presence in the MiddleWest.
Speaker A:And so, you know, these guys are continuing, you know, they're expanding their footprint.
Speaker A:They're going to continue expanding, you know, depending on what motor carrier they.
Speaker A:They hijack or.
Speaker A:Or buy or however.
Speaker A:However they get to it, they're going to, you know, be bidding and stealing freight all over the country.
Speaker A:So.
Speaker B:I gotcha.
Speaker B:Yeah, I think it's a.
Speaker B:It's definitely a tricky landscape, man.
Speaker B:I think that's.
Speaker B:That's the challenge we face, especially as a.
Speaker B:As a freight company or a freight brokerage.
Speaker B:Um, you know, I Think somebody said this a while back, but I think identity is the main issue.
Speaker B:Are you who you say you're representing?
Speaker B:Are you with the company that you say that you are?
Speaker B:So even with, you know, a show like this, I want to use this and send this to some of our shippers because I think there are some shippers out there that need to take better corrective action with pictures, with you know, cdl, documenting with, you know, know different types of, you know, cameras, video, that sort of thing.
Speaker B:Even, you know, checking with the broker and making sure that the broker puts the correct MC or the correct carrier on a, or on that specific shipment so that the person that we assign to a load or the person that we contract to the shipment is actually picking up.
Speaker B:There are some shippers that do really well.
Speaker B:We worked with a company out of Chicago a couple years ago and man, it was like a ten step process.
Speaker B:And I swear they had the social, they had, you know, the, the cdl, they had pictures, they had the, you know, truck and trailer license plate numbers, everything.
Speaker B:And you know, probably because they were a victim of theft at some point, you know, a while back.
Speaker B:But I do think that, you know, with shippers there are, there is an area for improvement as well as the broker side where we need to document more, we need to be a little bit more thorough on that front.
Speaker A:The number one advice is, general advice that I always just offer to the supply chain brokers especially is relationships with your shippers is so crucial because so, so many of these attacks could be stopped at the shipper and you know, requiring them to do their due diligence and you know, go beyond the trailer number and tractor number.
Speaker A:I mean at the end of the day, what does that tell us?
Speaker A:You can, you can swap that out super easy.
Speaker A:So yeah, having these carriers validate who's actually coming to pick it up and you know, and having that good communication with your, your freight broker to validate, you know, who's supposed to be picking it up is so crucial.
Speaker A:So can't stress that enough.
Speaker B:There's a couple of them that do it really well and there's a couple of them that literally all you have to do is sign your name on the sheet and with you have the pickup number and you're, it's golden.
Speaker B:So yeah, there's definitely room for improvement there.
Speaker B:I'm going to shift over real quick.
Speaker B:So say for instance, you know, you're sitting there, you find out that a load did not get delivered right.
Speaker B:You get a call from your customer, you get A call from the receiver saying, hey man, where's this shipment?
Speaker B:It's not delivered yet, but we got some communication from the carrier that morning from, probably from, you know, funky email address or whatever.
Speaker B:They said they delivered it.
Speaker B:You know, they probably forged the pod, they sent it to you and then, you know, your customer says, hey, this, this product never delivered.
Speaker B:Where is it?
Speaker B:What's going on now?
Speaker B:You know, you start to get a little bit tense.
Speaker B:You, you know, your heart starts to race a little bit faster.
Speaker B:What do the first 48 hours matter?
Speaker B:Or why do the first 48 hours matter in these scenarios?
Speaker A:I mean, yeah, each, each of these, like the pod manipulation is, is almost a separate, separate bucket versus these other.
Speaker B:SC time for that today.
Speaker A:No, no, no, of course it's just first 40 hours, no matter what.
Speaker A:72.
Speaker A:I mean the sooner you can figure it out, the better and the sooner that you can sort of train your brokers to, to look out and you know how to recognize some of these scams.
Speaker A:Like it's, it's so funny when I get somebody reached, you know, reaching out and they're like, hey, like I actually do think that this is the driver.
Speaker A:You know, they're broken down in like, you know, laundry listed excuses.
Speaker A:It's like you are dealing like no, we, we spoke with the driver.
Speaker A:It's like you're not, you're not dealing with the driver.
Speaker A:You're dealing with a scammer right now who's pretending to be the driver.
Speaker A:And so, you know, that is, get, get somebody else involved.
Speaker A:Like there's a bunch of different things that we can do to, to tell you right away that you're probably dealing with, with a scammer, whether it be, you know, we have access to different softwares where we can run the phone number.
Speaker A:But figuring out who picked up that load and deciphering which scam we're dealing with, like for example, you know, if they're laundering it through cross docs and local carriers, you know, if you can, if you can figure out who actually picked that up.
Speaker A:You know, a lot of the times that guy doesn't necessarily know that he's helping steal that.
Speaker A:And so figuring out who that driver is.
Speaker B:One scenario that happened a couple weeks ago or, hell, it's a, it's a couple months ago now, but we had a shipment pickup in Alabama.
Speaker B:They, the company that we assigned it to was a valid company.
Speaker B:I think they picked up one or two loads prior to booking a load with us.
Speaker B:And so they're active in our system.
Speaker B:They were green flagged in our system.
Speaker B:They picked it up.
Speaker B:They then assigned a different driver to it.
Speaker B:He picked up that load and went to a different location.
Speaker B:This load was supposed to go to the Northeast.
Speaker B:Well, he picked up that load in Alabama, took it to Indianapolis to a warehouse where, you know, that's what he thought he was going to do.
Speaker B:So not necessarily even that driver, the driver picked up the load in Alabama.
Speaker B:He thought he was doing the right thing.
Speaker A:Yeah.
Speaker A:So you're saying that he, he basically, he got hired, he probably picked it up from the load board and was told a different destination.
Speaker A:That's what you're saying, right?
Speaker B:Yeah, exactly.
Speaker B:And then he, you know, it was probably posted as like an Alabama to Indiana and he called on it, you know, got the rate or whatever.
Speaker B:And then Senator, you know, got unloaded in Indiana at that point, you know, that the fraud or the scammer picked up the, or used a different carrier to pick up load in Indiana and then took it out to Phoenix.
Speaker B:So at that point, you know, the, the, and they were playing along, you know, the whole time that, you know, sent in the pods to the, I think it was a two stop load.
Speaker B:They sent in the pods to the first stop, signed or you know, forge.
Speaker B:And then we started to catch on as soon as the customer said, hey, where's this product that hasn't delivered yet?
Speaker B:So at that point you were calling the shipper, okay, who picked up the load?
Speaker B:Who did you get this load from?
Speaker B:Trying to gather information.
Speaker B:Do you, is that like the best course of action where you're, you're just on investigative mode and going into, you know, trying to figure out, okay, matching these pieces up in different areas, is that the best way to do it?
Speaker A:Yeah, I mean the shipper, like what, what was collected at the shipper is usually the most critical piece of evidence in where to start.
Speaker A:That's not always the case.
Speaker A:Like again, these scams are consistently changing and developing and know there might be some useful information just depending on the situation, you know, that could be useful other than what was collected in the shipper.
Speaker A:But yeah, usually having that, having a good contact at the shipper to go and collect whatever was collected, you know, if there's surveillance, obviously that's key.
Speaker A:And you know, a lot of times also like I'll look at inspections all the time.
Speaker A:Like I validate a ton of different things just through the inspections.
Speaker B:Right, right.
Speaker B:And when you say inspections, what exactly do you mean for, for the listeners.
Speaker A:Out there, like the DOT inspections.
Speaker A:So, you know, if we know what, what the actual tractor was or say we have plates, for example.
Speaker A:I can tell pretty quickly if it's a stolen plate even without running the plate through like a, an investigation software.
Speaker A:You can go look at inspections, etc.
Speaker B:So inspections, they got to have a lot of inspections for that tractor, for that trailer.
Speaker B:It shows them all like, who is.
Speaker A:It, who, who is it inspected under this, this was, you know, being inspected under what?
Speaker A:Motor carrier?
Speaker A:Well, is that the motor carrier that we have picking it up or is that somebody different?
Speaker A:So a lot of times, even if we can't figure out who that motor carrier is because the surveillance isn't clear and we can't really pick up what's on the side of the tractor or whatever maybe they use, they were told.
Speaker A:I mean these guys, these local carriers, it's almost like they play dumb and sometimes they're kind of, I think, skate the line of they don't want to necessarily be involved, but they're getting paid.
Speaker A:And so they'll do the little things like, you know, put the paper placard on it.
Speaker A:But if you can actually usually find who out, you know, find them and find who they are, sometimes they'll play ball with you.
Speaker A:And so sometimes the way to do that is, yeah, figuring out who they actually drive for, et cetera.
Speaker B:And I also think like even, you know, you see some of those paper placards where it literally looks like a piece of paper written on there, typed out with like scotch tape around it.
Speaker B:To me, I think we need to go to like a.
Speaker B:No, like there's no paper placards allowed.
Speaker A:We should be there as an industry.
Speaker A:Absolutely.
Speaker B:I mean, I feel like that's an area that like, okay, this is like bare bones.
Speaker B:This is a piece of white paper that's being scotch taped to a side of a truck that says the emcee, you know, could easily be ripped off like a non legit company.
Speaker A:Unfortunately, like that wouldn't really even solve much because these guys, like, you know, we've had investigations where it's led to.
Speaker A:We've seen like they have their cousins or whatever that run a little shop, a mechanic shop that will do that as like a side piece of their business is they'll print out legit placards.
Speaker B:You know, I think so.
Speaker B:Tell me, tell me this.
Speaker B:And I don't, I don't want you to, you know, give out any confidential or proprietary information here.
Speaker B:But you know, what's kind of a particular challenging case that you've worked on and obviously has been closed at this point, you know, and I guess, like, how did you approach that?
Speaker B:Or what's the best way?
Speaker B:Or give us a.
Speaker B:Some sort of story that you can tell the audience, you know, something that we didn't think about.
Speaker A:I don't know if this story will give you any new ideas, but it's kind of a cool story of, like, how the industry sort of came together and helped help me get what I needed to get, like a search warrant issue.
Speaker A:So this was probably the coolest capper that I've worked.
Speaker A:It was actually like fourth of July, so almost like a year ago, right around this time, it was Agility Express.
Speaker A:I don't know if you guys were victim to it.
Speaker A:There is probably.
Speaker A:I mean, there was like, 50 different victims to this.
Speaker A:And it was basically, they were bidding on these loads.
Speaker A:They kind of like, pulled a bunch of different motor carriers where they were holding these loads hostage, demanding ransom, and.
Speaker A:And then just, you know, picking and choosing which.
Speaker A:Which loads to steal outright.
Speaker A:I mean, these guys probably ripped, like, 50 plus loads.
Speaker A:I mean, there's.
Speaker A:There's a ton of different brokers that were involved.
Speaker A:I think I had, like, just myself, four clients that were victim to this scam.
Speaker A:And I'll tell you a ton of my investigations.
Speaker A:I'm investigating over the computer.
Speaker A:And then, you know, once I develop intel on the group or.
Speaker A:Or, you know, wherever I need boots on the ground is kind of where I'll pull on my network or use some of my guys, depending on.
Speaker A:On where it is.
Speaker A:And then, you know, they'll do the.
Speaker A:The boots on the ground, the surveillance, whatever I got added to.
Speaker A:To basically, like, a big teams group of, you know, different victims of.
Speaker A:Of agility, and got a tip that, you know, this one warehouse would possibly could be affiliated.
Speaker A:I responded and, like, sure enough, while I'm there, I see a tractor pull in with a.
Speaker A:A paper agility placard.
Speaker A:And so, you know, I thought at that point we had what we needed.
Speaker A:Like, we were looking for these guys while I found them.
Speaker A:And this, you know, this just shows you, like, there's only so much you could do.
Speaker A:Like, you.
Speaker A:At the end of the day, I don't have a badge, even if I know who's stealing it, who the criminals are.
Speaker A:Like, my network with law enforcement is so critical because, you know, they're the ones that you got to lean on to, to issue the search warrant, you know, present to the DA Et cetera.
Speaker A:And so anyway, this.
Speaker A:This particular one, you know, I.
Speaker A:I thought, well, one, you know, I collected.
Speaker A:I type it in the group, I basically asked, you know, what are we looking for?
Speaker A:I'm about to see if I can get in this warehouse.
Speaker A:I basically act like, you know, I have a tracker and, you know, I want to see if my freight's in the warehouse.
Speaker A:Immediately denied entry.
Speaker A:Kind of expected that.
Speaker A:But at the same time, usually if you're innocent, you, you know, you.
Speaker A:I've also plenty of situations where they let me in, no problem.
Speaker A:This one was different.
Speaker A:So at this point, I call the police.
Speaker A:I think that, you know, I.
Speaker A:I have evidence of these trucks here.
Speaker A:You know, I could explain it pretty good of exactly what was going on.
Speaker A:Deputy shows up.
Speaker A:And during this time, actually, I had followed a tractor out of this facility.
Speaker A:And I'm.
Speaker A:I'm recording it.
Speaker A:I got the plate on it.
Speaker A:I didn't continue following it because I was actually waiting on the police.
Speaker A:So I had to turn around, please get there.
Speaker A:Police try to get in and.
Speaker A:And they deny the police entry, too.
Speaker A:Said, absolutely not.
Speaker A:You need a search warrant.
Speaker A:Which you don't.
Speaker A:You don't really see that all the time.
Speaker A:Usually if.
Speaker A:If the police show up, you know, they.
Speaker A:They play ball.
Speaker A:So sure enough, you know, get.
Speaker A:They get no entry.
Speaker A:And trying to explain cargo theft, depending on, you know, who you're getting, if they don't see it all the time, it can.
Speaker A:It can sound sort of complicated.
Speaker B:And anyway, that's surprising to me that, like, the.
Speaker B:Where like, they had the ability to deny the deputy access to the warehouse.
Speaker B:Like, obviously you have something to hide.
Speaker B:Obviously, you know, they know the law.
Speaker B:So that's definitely very interesting to see that.
Speaker A:Absolutely.
Speaker A:And so, like, this is what I think, like the citizen world doesn't understand.
Speaker A:It's like, okay, doesn't matter that we saw the agility truck here.
Speaker A:It doesn't matter that we definitely know that they had.
Speaker A:They are holding some of the freight at this location.
Speaker A:If we can prove that we have solid, you know, if I didn't get a video of our freight moving in there, if I can't prove that this truck picked it up and this truck is right here, then we're probably not going to be able to do anything.
Speaker A:Like, does it matter?
Speaker A:Just because I saw an agility truck there, I have to now work on the evidence, which.
Speaker A:That's.
Speaker A:That's the toughest part of the job.
Speaker A:So this was cool because we had a ton of.
Speaker A:A ton of different victims.
Speaker A:You know, I sent that video, said, does anybody recognize this plate or this trailer?
Speaker A:Sure enough, somebody in the group says, yeah, I think that's the plate that, you know, picked up my freight and wherever sends it back.
Speaker A:We still didn't have an active detective involved within Elk Grove, and we didn't really have, like, a good case.
Speaker A:So basically, depending on where the theft occurred is where the agency that's working that.
Speaker A:And so super long story short, I ended up finding.
Speaker A:Finding enough evidence by.
Speaker A:I mean, I.
Speaker A:I know I'm kind of rambling.
Speaker B:No, I love it, man.
Speaker B:Well, I just, I think it's.
Speaker B:You're telling a story, and I think it's like, you know, it's important for the folks that are listening in, especially brokers like myself.
Speaker B:I want to learn kind of the intricacies of it, right?
Speaker B:Like, you have a boots on the ground feel.
Speaker B:And I think that's where, you know, we want to know more about that.
Speaker B:We're freight brokers.
Speaker B:We, you know, we have different processes that we follow.
Speaker B:But I think if we know more of that, okay, now we can fine tune our processes.
Speaker B:Now we can fine tune X, Y and Z to try to mitigate that risk.
Speaker A:Right.
Speaker A:So.
Speaker A:So kind of what happened here was basically, you know, I had this trailer and the plate showing up at.
Speaker A:During one of the thefts.
Speaker A:But since I didn't follow it, I didn't really know where that trailer ended up.
Speaker A:So that really wasn't good enough to get somebody super excited.
Speaker A:Then I ended up getting one of.
Speaker A:One of my clients had a theft.
Speaker A:I ended up finding that trailer.
Speaker A:I, you know, I went and collected the evidence and got really good surveillance of exactly the trailer, tractor, the driver that showed up.
Speaker A:I.
Speaker A:I went back to that warehouse.
Speaker A:I followed another tractor and trailer out of there.
Speaker A:You know, I kind of did my own little surveillance there.
Speaker A:Found another warehouse where they were storing most of their equipment.
Speaker A:Sat on that.
Speaker A:And this is kind of cool.
Speaker A:Like, this was the part of my job that's definitely the M.O.
Speaker A:the most fun.
Speaker A:It's kind of like what you're picturing where I'm finding a discreet place kind of with binoculars, taking pictures and sitting on it like, super late at night, like.
Speaker A:And it was, you know, putting the whole story together.
Speaker A:And found both of these warehouses they were taking trucks back and forth from.
Speaker A:Found my.
Speaker A:The trailer that was utilized in.
Speaker A:In one of my clients stuffs at this location.
Speaker A:So now I could pinpoint it.
Speaker A:You could see that they were taking off the stickers and moving it so that, you know, you couldn't really.
Speaker A:And I could.
Speaker A:You could see, like, the.
Speaker A:Where the sticker used to be.
Speaker A:So I, you know, Got a good picture of that.
Speaker A:And then we ended up.
Speaker A:We presented that to our law enforcement agency at this point, had really good evidence.
Speaker A:We knew exactly where they were going back and forth from.
Speaker A:I had.
Speaker A:Where my trailer exactly was at this moment in time right now.
Speaker A:Plus I have it on surveillance from.
Speaker A:From the theft.
Speaker A:And then, you know, and then, and then it's pitching that to the law enforcement agency, getting them excited about it and, and then, you know, presenting it to.
Speaker B:To DA or whomever in those scenarios.
Speaker B:Obviously there's hundreds of thousands of dollars of cargo being taken or being stolen.
Speaker B:Does that not move the needle enough for, you know, some of the folks that the have the authority to take action?
Speaker A:Not really, to be honest.
Speaker A:Like, it's still treated as a property crime, you know, like drugs and murder, really move the needle.
Speaker A:They get really excited about that.
Speaker A:Or kidnappings, you know, rightfully so, you know, at the end of the day times, you understand, like, okay, I get it.
Speaker A:You guys have some other things on your plate that are taking precedence.
Speaker A:What was cool on this one was that because there were so many victims involved, there is, you know, kind of like there was people reaching out about publicity and they wanted to post different publications because it.
Speaker A:It was.
Speaker A:Ended up being a very big success.
Speaker A:So anyway, we got.
Speaker B:Did you get the freight recovered or did you.
Speaker A:Yeah, so we hit 2.
Speaker A:2.
Speaker A:Both of those warehouses.
Speaker A:And that's the other thing.
Speaker A:It's like, even to get the.
Speaker A:The search warrant signed off on, like, the process, it takes.
Speaker A:It takes so long.
Speaker A:So it's just, you know, once we finally thought we had enough, it was just kind of, you know, a waiting game.
Speaker A:We finally, we finally hit it and it was, you know, recovered.
Speaker B:For you, man, I'm sure that's like the.
Speaker B:That's like the victory or like the fist, you know.
Speaker A:Yeah, man, it's like catching a big fish.
Speaker A:It's like.
Speaker A:Yeah, I love it.
Speaker A:I love it.
Speaker B:That was cool, I guess.
Speaker B:Tell us more, man.
Speaker B:About, like, obviously, you know, how does this impact business, and I think, you know, for us, how does this impact business where we're hired to do a job and we're hired to pick up a load from A to B, and it's our job to vet out those carriers and make sure that we're using carriers that have a good track record, that have the appropriate regulations and, you know, updated insurance and that sort of thing.
Speaker B:Also, you know, we're responsible for making sure that these carriers are who they say they are.
Speaker B:It's always fascinating to me that some of these warehouses or some of these third party warehouses are getting paid under the table or they might be getting offered, you know, five, ten grand to hey, I need this product stored in this place for two days.
Speaker B:Well, you might get like a mid level, you know, employee man, five grand is quite a bit to, you know, store product for, for a couple days and be an accomplice to theft or fraud.
Speaker B:Like I don't think a, you know, 25 year old kid or hell, a 30 year old person really cares about that if you're offering them five, ten grand to approve a truck, you know, a truckload of whatever product to go into this warehouse.
Speaker B:So I think that's, that's what's fascinating to me is like the impact on businesses and how that works, especially in our space.
Speaker B:And then also, you know what sucks about this is like the scenario that we had is that trucking company that picked up the load in Alabama and took it to Indiana.
Speaker B:Well, who's paying them?
Speaker B: ng them the thousand bucks or: Speaker B:Like who's doing that?
Speaker B:Nobody's paying them.
Speaker B:Now it comes back onto us again whether we want to pay that carrier and it's not our legal obligation because they never sign a contract with us.
Speaker B:But yeah, I just, I always think it's fascinating the impact that it has on business and how this can, you know, throw a monkey wrench and throw a monkey wrench into everything.
Speaker A:Yeah, it's this.
Speaker A:I, I did a presentation recently to this big insurance company on cargo theft and you got brought up, they, they had a, I think it was Oxford University in, in London.
Speaker A:Basically do like a dissertation on cargo theft and like study the broader impact that it has on, on the economy and the globe.
Speaker A:And it was super interesting like what it gets into.
Speaker A:I, I'll send it to you after this.
Speaker A:But I mean it, it goes, it talks about everything.
Speaker A:I mean it is, it impacts everything.
Speaker A:I mean obviously us as consumers, we're paying for it.
Speaker A:You know, that's no doubt, that's easy.
Speaker A:It affects clear, clearly insurance companies.
Speaker A:Now we're starting to see a lot of insurance companies not insure theft.
Speaker A:You know, they're not making money.
Speaker A:You know, that's affecting, that's affecting the overall business, the trucking business.
Speaker A:You know, a lot of, a lot of small carriers are now just getting out and again we're, you know, it's actually helping the criminal.
Speaker A:So one of, one of the major scams is they will purchase the biz.
Speaker A:You know, this small carrier owner, operator thinks he's Selling his business, but he's really just selling his MC and now they're utilizing his business business to, to start stealing freight.
Speaker A:And what they're doing is they're waiting for these guys insurance to come up for expiration and then they're sending these cold emails out and this guy, you know, the rates are what they are.
Speaker A:These small trucking companies can't really survive anymore and, and now these criminals are capitalizing on that.
Speaker A:So now they're sending out these, these cold emails and these guys, you know, $5,000 sends sounds pretty nice right now because they haven't been making money.
Speaker A:So yeah, it's definitely affecting these trucking business at large.
Speaker B:Well, and I think that, yeah, that's what sucks about it man is like the, even the organized, you know, cargo theft or the organized crime rings that we're dealing with, these dudes are smart.
Speaker B:They know the industry, they know the game quite a bit.
Speaker B:And you know, we've seen some things over time where they can fight their way through some loopholes and they know what brokers are going to ask them and they know that you know what the verification process is.
Speaker B:We had an employee not too long ago, he had a, he came up with the driver driver verification process.
Speaker B:And it's pretty ironclad in our books and what we've dealt with so far, you know, that's a lot of time.
Speaker B:You know, our, our brokers and our salespeople and our carrier salespeople, they're following this process and we've mitigated a ton of risk that way, you know, and that, that comes my next question, man.
Speaker B:What are some preventative measures that brokers or listeners out there can do to, to help protect themselves?
Speaker A:I have you brought that up because I think that's probably the most important topic going on right now.
Speaker A:And I think, you know, going back to the basics, training your brokers on how to recognize these scammers.
Speaker A:I mean there's so many tools out way.
Speaker A:There's so many tools out there.
Speaker A:Highway carrier, four on one carrier.
Speaker A:Sure, they're all great, but I think we need to be careful to not let that, you know, to not let that skew how we think about validating a carrier just because it passes.
Speaker A:I mean it's, it's proven that all these, all these tools can be beat.
Speaker A:They're great.
Speaker A:Don't, don't get me wrong.
Speaker A:I love, I love that you know that they're out there and they're.
Speaker A:Honestly, they're even great like investigations.
Speaker A:They offer so much data out there that they're collecting.
Speaker A:And so they're.
Speaker A:They're all great.
Speaker A:But really training your brokers on what questions to ask, how to recognize it, also how to not teach them, you know, about highway, about the different carrier tools out there.
Speaker A:I see that all the time that, you know, I think that these scammers are calling in and they're.
Speaker A:They're learning more about the vulnerabilities because these brokers, inexperienced brokers, will pick up and sort of like teach them what they're.
Speaker A:What they're trying to validate them based on.
Speaker B:So, anyway, no, I think you're.
Speaker B:I think you're absolutely right.
Speaker B:And I think that's, you know, is it software?
Speaker B:Is it training your staff?
Speaker B:Is it a, you know, a course every couple of weeks?
Speaker B:Is it continuing continuing education?
Speaker B:How do we, you know, set up demos with highway or with the carrier 411 on things to look for, things to look at.
Speaker B:You know, I also think, you know, from preventative measures, how are we, you know, what kind of risk do we want to take?
Speaker B:And, you know, I think a lot of times, like a broker like ourselves, we use a.
Speaker B:We use highway as an example.
Speaker B:We'll say a carrier sales rep gets a call from a carrier, they go into highway, they type in the mc.
Speaker B:We have like a pass or fail system.
Speaker B:And, you know, depending on what that looks like, if it's a pass, a lot of times you'll see brokers just go in and, you know, add the carrier to the load and everything else is golden until, you know, they walk off with your shipment and they steal it.
Speaker B:But I think a lot of times they're like, really honing in on what is a pass, what is a fail, what are some of the things to look for when you're booking some of these carriers.
Speaker B:And I think a lot of times, too, Jimmy, I think we've gotten so far away from, like, voice communication where a lot of the bookings are done digitally and a lot of the bookings are done over email that, you know, you don't get a feeling or you don't get a sense on the other line where, you know, you're not.
Speaker B:You're not having a conversation with these people.
Speaker B:And now I understand that, like, it's a lot more efficient to, you know, book a carrier digitally, which, like, I'm a huge fan of.
Speaker B:I also think that, you know, with the email process, making sure that these individuals or these dispatchers that you're booking with are legit and valid.
Speaker B:But I do think there's some value in placing a phone call or if you feel like somebody's on the fringe or you feel like somebody is not as good or maybe, maybe they're, you know, it's.
Speaker B:Everything doesn't really match up.
Speaker B:Well.
Speaker B:I think you need to make a phone call, and I think you need to have a conversation, whether that's with a dispatcher, the driver that you're booking it with, with anybody with the company.
Speaker B:Maybe you go to FMCSA and you call the owner of the company.
Speaker B:You know, those are things that I feel like we're skirting around.
Speaker B:And I feel like, you know, technology is awesome and I love it.
Speaker B:And, you know, we're a huge advocate for using every tool in the, in the toolbox.
Speaker B:But I think there is some value in that where, you know, we are kind of, you know, overseeing or skirting by some of those, those things.
Speaker A:You're spot on.
Speaker A:And, you know, we're getting better.
Speaker A:I think with cargo theft going to, to the levels that it's going, like, we're starting to see those extra measures taken.
Speaker A:But, like, you know, I'll, I'll speak with brokers all the time that, you know, will tell me that they spoke with the driver while he's at the shipper.
Speaker A:And I tell them, okay, well, you know, that's good that you guys are implementing that.
Speaker A:You're, you're trying to speak with the driver while he's at the shipper.
Speaker A:But if you're already doing that, why not ask to speak with the warehouse person that's loading them?
Speaker A:I, you know, I, I give that as a recommendation all the time.
Speaker A:Speak with the warehouse person while he's on site and he's getting loaded.
Speaker A:Say, hey, you know, can I speak with your warehouse manager?
Speaker A:Utilize FaceTime.
Speaker A:I mean, everybody has a smartphone.
Speaker B:Yeah, it's good.
Speaker B:Oh, I love that.
Speaker B:I haven't heard that one yet.
Speaker B:I was going to ask you something real quick.
Speaker B:So preventative measures, what I keep hearing from you and then a couple things that I said is just training your brokers on what to look for, how to do it.
Speaker B:What are some of the shady actors, shady characters in our industry and what they're doing today.
Speaker B:Are there any publications that you follow currently?
Speaker B:I know you sent me one a couple weeks back.
Speaker B:You know, helps out with freight fraud and where we're at, is there a couple publications that you have that are, that are pretty good that you, you follow today?
Speaker A:I mean, like, I know that, like the, all these different carrier screeners will, will put out, like A weekly email on, on different exposed mcs, et cetera.
Speaker A:I know like the band report, they, they, they, they do the same, the same thing.
Speaker A:He, what I liked about him is he, he looks at like a lot of different shady insurance agents.
Speaker A:What, what we're finding is that a ton of these agents and insurance companies that consistently either insure the double brokers or some of these scammers seem to be coming up time and time again.
Speaker B:So that's like repeat offenders from the insurance side that they're also in on it or they're not.
Speaker A:Yeah, well it's not, I mean it's theories, it's kind of.
Speaker A:Yeah, I haven't seen anything proven at this point, but yeah, I mean it seems like there's some shady agents and potential insurance companies that they might write.
Speaker B:A policy that's invalid and put it on like an Accord document and send it over to you so it looks legit.
Speaker B:But they don't, they don't have anything with a, an actual insurance company.
Speaker B:It's just a, a document that they show that, that says that that's one, that's one thing.
Speaker A:But yeah, other times, yeah, it's like it's insurance agents that are helping mask a lot of fraudulent stuff going on.
Speaker A:And so like looking at the, looking at the Accord and seeing who the insurance agent is sometimes will kind of be like a red flag tool.
Speaker A:Like okay, you know, proceed with caution here.
Speaker B:I do want to talk about like pod manipulation and how brokers can look at that and like some of the things that they can do to overcome that.
Speaker B:But how do we stop it?
Speaker B:How do we, you know, we mentioned training.
Speaker B:What are some other things that we can do to stop this or put a, put a little bit of a dent in there?
Speaker A:Yeah, it's good.
Speaker A:Great question.
Speaker A:I mean coming together in a supply chain, so working together, I think, you know, getting your shippers involved, making them, you know, go the extra mile.
Speaker A:Same thing with brokers, brokers creating a culture.
Speaker A:So that was the other thing I wanted to touch on.
Speaker A:Like you know, aside from training, like you're, your broker's got to understand that hey, we don't tolerate laziness here and if, you know, if we do an internal investigation and you shouldn't have booked this load, you know, there's going to be some, something to pay here because I think that's important right now if we really want to.
Speaker A:The freight broking world we all know is super fast paced, you know, based on commission.
Speaker A:And so you get, you get a lot of Brokers on a Thursday or the end of the week, afternoon hours where they're not taking the time to, to go the extra mile to make sure that, you know, they're doing the right things.
Speaker A:And so I think, you know, coming together as a, as a supply chain train, you know, training Paramount, keeping your relationships with your shippers super important.
Speaker A:Those are to me the two things that stick out.
Speaker B:Yeah.
Speaker B:Collaboration in the industry, you know, working together to sniff out these bad actors.
Speaker B:One other thing that I, you know, you mentioned this earlier, but I, I want to think like even from, you know, the collaboration piece or creating culture, it is, it is more of a fast paced business.
Speaker B:Right.
Speaker B:Freight brokerage.
Speaker B:It's fast paced just based on commission.
Speaker B:Do you think, and you mentioned this earlier, you know, on the show around holidays.
Speaker B:Do you think that it's more, you know, theft occurs quite a bit higher around the holiday?
Speaker B:Do you think that's an uptick in volume or do you think that's from brokers having skeleton crews that are not as equipped to do some of the work?
Speaker A:I think it's, I think it's both.
Speaker A:I think it's, it's both.
Speaker A:I think uptake in volume for sure.
Speaker A:That.
Speaker A:And then.
Speaker A:Yeah.
Speaker A:And then also this.
Speaker A:Yeah.
Speaker A:What you just mentioned, like holiday people not working.
Speaker A:Yeah.
Speaker A:I always recommend like, you know, if you know, holidays coming up, put an extra floor manager, you know, that's making sure that they're found their, their process when they're, when they're screening carriers, etc.
Speaker A:And not having that available sometimes is.
Speaker B:Yeah, I think that's, that's, it's definitely.
Speaker B:That's something that we've seen over.
Speaker B:You know, we have more cases and more shady actors that come out during the holidays just because, in my opinion it is because of the, you know, the skeleton crews where the main brokers on vacation or maybe taking the weekend obviously available.
Speaker B:And then you got like third, fourth and fifth string folks that are manning the phones and doing the, the vetting.
Speaker B:Yeah, that's something that I definitely think needs to be addressed.
Speaker B:You know one.
Speaker B:Another thing that I wanted to address here with the pod manipulation, is that something where do you believe that shippers or receivers need to come up with a stamp?
Speaker B:Do they need to have a, a sticker process?
Speaker B:I feel cost, I feel like Costco and Walmart are pretty damn good at this.
Speaker B:But even with the sticker process with, with Costco or like a stamp at different receivers.
Speaker B:I mean I think when I see a pod and I see like a name scribbled on there with a date.
Speaker B:I like, what the hell is that?
Speaker B:You know, I feel like a lot of times we have to figure that piece out.
Speaker B:And as an industry as a whole, I think we have to do better there.
Speaker B:I can't, like, you know, how many loads get scammed due to somebody writing their signature that you can't, you know, read it anyway.
Speaker A:Yeah.
Speaker B:And then they put a name next to it.
Speaker A:Yeah, the.
Speaker A:The.
Speaker A:The pod scam is.
Speaker A:Is.
Speaker A:Is tough because to me, like, the.
Speaker A:The receiver should know if a truck comes in, and there should be better coordination and collaboration between the different parties involved.
Speaker A:Of course, knowing and understanding what the stamp is at the receiver.
Speaker A:But at the same, you know, the same rate, these.
Speaker A:These criminals understand what that stamp is, is.
Speaker A:Well, and it's very easy to.
Speaker A:To copy that.
Speaker A:Now some of our investigations, what I've seen is like, you know, the different tracking systems out there.
Speaker A:Obviously, you know, if it's any.
Speaker A:Any load, you should be making your carriers track and tightening up that.
Speaker A:The geofence.
Speaker A:So, you know, most of the time it defaults to two miles.
Speaker A:So anytime that they're within two miles, they can just say that they delivered and send the pod.
Speaker A:And we've actually seen that be the case where these guys are transferring the phone over to, like, a decoy vehicle, and then they're finishing the delivery and that decoy wheel with the macro point.
Speaker A:And then oftentimes, actually, even with the tracker, so even if.
Speaker A:If the load is tracked and has light sensors on it, they will.
Speaker A:They'll.
Speaker A:They'll go to a dark area, they'll open the trailer in the darkest area possible, transfer it to a shoebox, and they'll.
Speaker A:They'll bring that shoebox to a decoy vehicle that will actually finish that.
Speaker A:That delivery the next morning.
Speaker B:Well, and they'll go.
Speaker B:What you're saying is they'll.
Speaker B:They'll take the shoebox to the receiver so it looks like.
Speaker A:Yeah.
Speaker A:So in the receiver vicinity.
Speaker A:So as long as they're within two miles, that.
Speaker A:That is.
Speaker A:Seems like that's the standard.
Speaker A:Now.
Speaker A:You can change that, and I would recommend that you do that.
Speaker B:All right, Jimmy, if I'm a shipper, what advice would you give to me to mitigate any type of risk out there in.
Speaker B:In terms of theft and fraud?
Speaker A:Yeah, put me on the spot with that question.
Speaker A:But I.
Speaker A:It's a great question.
Speaker A:Um, and I think that the more risk management you have, the better.
Speaker A:So the first thing I would do is, you know, have signage showing up saying, hey, smile you're on camera, you know, just something as simple as that.
Speaker A:Because there's different, there's different scams.
Speaker A:So if, if this, if the driver that shows up is a local carrier that's getting, you know, basically duped into laundering that freight, it might not work for that.
Speaker A:But there's also a ton of scams where, you know, the Singh, for example, they a lot of times will intercept it and steal it with their own drivers, their own freight.
Speaker A:So having signage that will, you know, say, you know, incentivize or basically just show that, you know, that, that, that you're on camera, smile, taking photos, having a very good driver sign in, check.
Speaker A:So I know there's this new.
Speaker A:There's this new software out there right now.
Speaker A:I think it's called like Verify id where it makes sure that the, that the driver's li.
Speaker A:The driver's license presented is not a fake id, that it's a real id.
Speaker A:It's available in every state.
Speaker A:Like, I know that some state law is different.
Speaker A:It's still available if you need to pull it, but like, it can't be accessible to.
Speaker A:I don't know.
Speaker A:You know, there's, each state has different laws, you know, making sure that the person checking in the driver is, you know, I always say look at, look at the cab car.
Speaker A:So if the broker can collect the VIN or can collect information on what the actual tractor, you know, identifying information on the tractor.
Speaker A:Well, the, the warehousement can, can check that just by looking at the, the registration, which is usually available right on the door when you open it.
Speaker A:So that, that goes a lot farther than, than verifying the trailer number, the tractor number, which we know that that can be changed pretty interchangeably.
Speaker A:Yeah, like making sure that your, your warehousement are not only looking at the license and validating that it's a real id, but also looking at it to just make sure that it's the right person.
Speaker A:These guys pass around IDs all the time.
Speaker B:Well, and I also think I've seen some, you know, even from the shipper side of it, and I mentioned a little bit earlier, but, you know, they might scribble in their name and you know, a lot of times, you know, there's a, you know, heavy, heavy, you know, population where the names are a little bit different, a little bit challenging.
Speaker B:And you know, they might not put the right name or they might have not have the best penmanship right where they're writing down a name.
Speaker B:You can't even, can't even read it.
Speaker B:And then all of A sudden they're going to load this person up with $50,000 with freight.
Speaker B:And so for me, like, I do think there's a little bit of responsibility there.
Speaker B:At the same time, there's, there's a lot of responsibility on the freight brokerage side.
Speaker B:I, I think from, from that man, I think carrier identity is, it's a huge portion of it.
Speaker B:You know, for anybody that's listening out there today, you know, I think it's, that is one of the major things that we address each and every time that we book a load.
Speaker B:And you know, with carriers and having those relationships are huge for us.
Speaker B:I know at our company we strive to have a 70% return rate or a 70% rate every single week of repeat carriers.
Speaker B:Right.
Speaker B:30% of those carriers might be, you know, first time carriers that we're vetting out and you know, using them for the first time.
Speaker B:But that's our goal.
Speaker B:Every single week, seven out of 10 trucking companies that we use on our shipments have to be set up or they have to be repeat carriers.
Speaker B:You know, in some weeks, you know, we, we might fall to like 68%.
Speaker B:Other weeks we might exceed the expectation of 75%.
Speaker B:So that is something.
Speaker B:Develop those carrier relationships, making sure that, you know, you're, you're giving them business, you're treating them with respect.
Speaker B:It's a carrier that you respect and you know, that is going to do good work and more importantly, not steal your shipment.
Speaker B:All right, man, well, we're cutting close on time.
Speaker B:What are some of your parting words or what are some things that you want more than anything for listeners to take away from the conversation that we had?
Speaker A:Just go the extra mile.
Speaker A:It doesn't take too much longer just to put a couple extra steps in your validation process.
Speaker A:And you know, if, if something stinks, it's probably because something's going wrong.
Speaker A:So I would say, you know, if, if, if you do have any issues, you know, call me.
Speaker A:There's, there's a bunch of different resources out there that can, that can kind of just start the process of, you know, hopefully trying to, to recover that freight.
Speaker A:I mean, I, I, I take calls 24 7.
Speaker A:So yeah, the best way to, to reach me is just, just call me on my cell phone.
Speaker B:Right?
Speaker B:Well, we're going to make sure that we put, you know, some information on how to get in touch with you in the show notes.
Speaker B:But yeah, Jimmy, man, we appreciate the time today.
Speaker B:Hopefully, you know, if you are listening and you're in the logistics industry, hopefully you got some value out of today's episode, and you're able to apply that in your day to day, in your day to day business to try to mitigate some of this risk that's out there and seems like running rampant know, across the country.
Speaker B:So, Jimmy, thank you very much for coming on the show, man.
Speaker B:I really appreciate it.
Speaker A:No, thank you, Ryan.
Speaker A:I appreciate you having me on.
Speaker A:It's been, you know, always love talking about cargo theft, so.
Speaker B:Yeah.
Speaker A:Thank you.
Speaker A:All right, take care.
