Supply chain theft is at an all-time high. Broker fraud, shipment interception and other forms of cargo theft are costing supply chains up to $35 billion annually, according to Homeland Security Investigations agency data cited by supply chain leaders speaking before a Senate subcommittee hearing in February. 

Worse still, as businesses reconfigure their supply chains in response to tariffs, they may be inadvertently exposing themselves to even greater risks.

Shippers, railroads and carriers are all perfectly justified in pushing elected leaders and institutions to take greater action to combat this growing industry scourge. What’s getting less attention, however, is the fact that too many chief supply chain officers are unwittingly leaving their company’s doors not just unlocked, but wide open for thieves to walk through.

Supply chain theft is increasingly being perpetrated by sophisticated organized crime rings. Bad actors are tailing truckers for hundreds of miles, waiting for opportunities to pilfer entire truckloads — a form of theft that shot up 273% in 2024, according to a new report and analysis from BSI Consulting — that they then hold for ransom.

They’re cutting air brake hoses on freight trains traveling through remote regions, and absconding with Nike shoes worth nearly half a million dollars.

They are on Facebook buying DOT numbers and fake safety ratings. And while the Federal Motor Carrier Safety Administration is overhauling its system in an effort to stop these kinds of audacious acts, it’s going to take time.

Given all of this criminal sophistication and how slowly our institutions are able to react, why are CSCOs making a bad situation worse?

The Problem With Paper-based Processes

The bill of lading has remained relatively unchanged for centuries. The process, which applies to roughly 40% of all containerized trade transactions, still relies on the physical transfer of paper records. 

The degree to which paper documentation is vulnerable to fraud and abuse cannot be overstated. Yet the very foundation of the chain of custody between shippers, carriers and receivers in 2025 remains a paper bill of lading. 

Your average paper bill of lading isn’t the easiest document to read. Pick any field, and you’re likely to find yourself squinting to determine whether that “8” might be a “9” or perhaps a “2.” Given that starting point, it’s not a big leap to imagine how easy it is to grab a pen, or to put a document in Canva, and manipulate the numbers. A thousand units in a shipment can be easily tweaked to look like 900, and the bad guys make off with 100 high-value units. Often, no one is the wiser.

Conversely, electronic documents are much harder to manipulate. An electronic bill of lading, or eBOL, creates an immutable digital paper trail, complete with timestamps and GPS locations. It significantly reduces opportunities for document tampering or falsification. It provides real-time visibility into shipment status and chain of custody. 

The value of eBOL extends far beyond fraud and theft mitigation. A 2022 analysis by McKinsey concluded that digitizing the bill of lading “could unlock more than $15.5 billion in direct benefit to the shipping ecosystem, and up to $40 billion in increased trade.” It added that the required IT investment would be more than offset by the resulting cost savings.

Leaving the Door Wide Open

Warehouses, distribution centers and yards are likewise a major vulnerability when it comes to theft.

First of all, far too many companies don’t have a gate or a guard protecting ingress and egress at their facilities. Second, too many facilities that do have gates and guards often still employ manual, paper-based processes for driver check-in, loading and unloading. And third, many facilities often outsource gate operations to low-cost, third-party providers who have little, if any, incentive to safeguard your brand or your goods.

Digital check-in systems address many of these vulnerabilities by requiring brokers to submit in advance driver details, including commercial driver’s license and DOT numbers, which must match when drivers physically arrive at the gate. Unauthorized drivers are denied entry, creating a critical security checkpoint.

Radio frequency identification technology integrated into yard management systems can be used to control access to restricted areas. And real-time visibility and data collection on all yard asset movements can create audit trails and identify suspicious movement patterns.

None of this is meant to imply that there are silver bullets that can eliminate the massive amount of sophisticated theft and fraud that’s occurring every day across global supply chains. There’s plenty of hard work ahead for the industry, and advanced technology can’t solve everything. Progress also will require deep and ongoing collaboration with law enforcement, regulators, partners and stakeholders.

But CSCOs and other senior supply chain leaders — in logistics, warehousing, distribution and asset protection most of all — can and should act more proactively and aggressively to plug some of the more glaring vulnerabilities created by the ongoing use of archaic, paper-based and manual processes. In doing so, they will not only reduce the escalating financial and reputational costs of theft and fraud, they will realize significant operational efficiencies and cost savings in the process. 

Glenn Koepke is vice president, industry and solutions strategy at Vector.