Rising Risk of Fictitious Pickups
By Joe Anderson, CPCU, ARM AFSB, CBRA
Principal & Fractional Chief Risk Officer
How well is your company protected from fictitious pickups? If they happen, who will pay: you, your distribution partners or possibly your clients?
A recent Insurance Journal report highlights a $400,000 cargo theft incident involving lobster meat stolen through a fictitious pickup. According to the report, a shipment stored in a Massachusetts cold storage facility never reached its intended Costco destination because an individual posing as a legitimate truck driver picked it up using fraudulent documentation and identity.
Law enforcement (including the FBI) is investigating the case, which aligns with a broader trend of organized retail crime leveraging fake paperwork and cyber-enabled tactics to intercept high-value freight.
Risk management and insurance considerations related to this crime:
• Fictitious pickup schemes are growing: Attackers exploit gaps in verification processes, creating realistic but fraudulent transport authorizations that conventional controls may miss.
• Documentation integrity is critical: Reliance on paper bills of lading and standard carrier credentials without robust verification increases susceptibility to impersonation and theft.
• Enterprise-wide Risk Management: Effective risk mitigation requires coordination between operations, security, logistics partners and insurers to validate identities, audit chain-of-custody and monitor deviations from expected movement patterns.
• Insurance coverage and claims clarity: Determining liability and coverage in cases involving social engineering or fabricated credentials can be complex. Losses can find black holes resting in between policies, and either be uninsured, underinsured, or result in insurance companies battling who should cover the claim. A risk management review including insurance policy and contractual transfer is critical.
• Third Party Risk: Many of today’s leading companies use outsourced distribution partners. This can be a challenging web of figuring out who will pay and who is responsible for a loss. Having a complete third-party risk review is critical to properly reserving, insuring, and transferring risk. It also helps to keep the self-insurance surprises away.
At Fortify Risk Management, our risk management veterans have on average 30+ years of corporate experience in managing risk, with companies like Carnival Cruise Line, Boise Cascade Company, Fluor Corporation, Sunkist Growers, and Idaho Power. We bring together risk executives with different backgrounds in a team to work with you to better optimize your risk management approach as you grow, increase profits, and create a great place to work for your employees.
Contact us today to find out how we can help: