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3 )) Understanding the Scale of the Issue Cargo theft has reached alarming levels, with a staggering 68% year-over-year surge in the fourth quarter of 2023, as reported by CargoNet, a subsidiary of Verisk. This trend was also observed in the third quarter of 2023, with a 57% increase in thefts compared to the same period in the previous year. Analysts warn that cargo theft is currently at its highest point in a decade, while projecting even higher numbers for 2024. A current estimate shows that 2,500 truckloads are stolen annually—an average of more than 200 truckloads per month. The cumulative impact is profound, costing the industry tens of billions of dollars annually and causing significant disruptions to supply chains. Primary Causes, Targets, and Implications The Annual Cargo Theft Report 2023, compiled by TT Club and BSI SCREEN Intelligence, identifies high inflation as a primary macroeconomic driver of cargo crime, particularly evident in the rise of theft within the food and beverage category. With grocery prices up significantly, there's ample opportunity for thieves to sell stolen food and beverages on secondary markets to consumers looking for cheaper prices. Eye-opening findings from the report include: • A notable increase in the theft of food and beverages, accounting for 24% of the global total, up from 16% previously. • Thefts involving electronics have slightly decreased to 9% of total incidents, but still pose a significant risk. • Road transport remains the most common mode targeted by thieves, comprising 71% of incidents. • The top five countries for theft are: Mexico, the United States, South Africa, Germany, and Italy. The proliferation of electronic supply chain technologies and digital transaction capabilities—while crucial for modern supply chains—has also opened the doors for bad actors to more easily gain access to sensitive freight and transportation information in order to commit fraud. Savvy and sophisticated criminals have seized upon these digital advancements to pull off phishing and identity theft-like schemes such as impersonating brokers or legitimate trucking companies via email or unsecured online platforms, gaining unauthorized access to freight, diverting shipments through crossdocks, and falsifying documentation in order to pick up loads. The Consequences for Shippers The ramifications of cargo theft and fraud extend far beyond mere financial loss. Beyond the tangible costs of product, revenue, legal, IT, and personnel expenses associated with dealing with a theft, the intangible damage to brand reputation and customer satisfaction can be even more detrimental, potentially resulting in the loss of valuable clients. Shippers face these 10 common pitfalls as a result of cargo theft and fraud: 1. Financial Losses: Cargo theft and fraud result in significant direct financial losses for shippers. In fact, the average value of a single stolen load is estimated at about $120,000. Other financial losses include insurance deductibles, legal fees, and increased insurance premiums. 2. Supply Chain Disruptions: Theft or fraud can disrupt the flow of goods within supply chains, leading to delays in delivery, production interruptions, and increased operational costs. 3. Reputation Damage: Incidents of cargo theft or fraud can tarnish a company's reputation, eroding trust among customers and stakeholders. For example, in the food and beverage category, stolen goods that are handled improperly can, in some circumstances, spoil before being

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