Transportation Business Resources

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Talkshow host Tim Dooner sits behind a desk covered in toys, clothes, and other merch. A backdrop behind him, and some of the branded toys say "What The Truck". A news chyron runs below him. Above, logos for SiriusXm, YouTube, LinkedIn, Facebook, Apple Podcasts, Spotify, TikTok, and X are displayed. An agenda of topics to the right says, TODAY'S SHOW: NORITA TAYLOR, TRUCKERS FOR TROOPS, RC SEMIS, WTT GEAR DOT COM, and CRAIG LEINAUER, above a QR code and logo that reads, Tai.

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TIM DOONER: You know we can't put in the ground, though, cargo theft, strategic theft. It's been the story of the year. It's been the story all year. I know you're sick of hearing about the topic. And we'd stop talking about it if the problem didn't grow, but that's not the direction that it's going in. So we have to have Craig Leinauer on. He's director of Inland Marine Claims at Travelers. And again, we have to get into it. And today we're going to focus a little bit more on an important aspect of it though, right, Craig? The liability. So we talked like the theft is happening, but what are the repercussions? What are the repercussions of such theft? Craig, thanks for coming on the show.

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An interstitial graphic with a semi truck that reads, What The Truck, appears before Craig appears via video call. Craig speaks in front of a wall of framed photos. The What The Truck logo above the agenda has now become the red Travelers umbrella logo.

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CRAIG LEINHAUER: Yeah. Thrilled to be here. Thanks for having me.

TIM DOONER: Well, I am happy to have you on. First of all, we talk about this problem all the time, right, cargo theft, strategic theft. What's going on right now?

CRAIG LEINHAUER: Yeah, so theft isn't really just about finding a truck on the side of the road and breaking into it anymore. That's traditionally what's been called physical or straight theft. But strategic theft is what's happening now.

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Text: CRAIG LEINAUER, DIRECTOR, INLAND MARINE CLAIM, TRAVELERS.

(SPEECH)
And this is different because thieves are using deceptive practices to manipulate truckers or freight brokers. So technology plays a big role here, especially AI, right? And it's so sophisticated that there's really a whole new set of tools that thieves have.

And so, what we're seeing are blended methods where thieves impersonate legitimate trucking companies. They'll change bills of ladings. They'll create fake documents. And then they're also using other tactics, like impersonation and phishing attacks, to steal cargo. So, believe it or not, there are actually several groups of advanced organized thieves that are internationally based overseas.

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Text: TODAY'S SHOW: CARGO THEFT LIABILITY, DON'T BE A STRANGER. The cargo theft line item is highlighted in yellow.

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They have their own supply chains and their own freight laundering rings, right? So, unfortunately, this is really putting cargo theft at an all-time high.

TIM DOONER: Oh, man. It's not good at all. And it seems like it's been really hard. Like I was out in Atlanta at a NASCAR event with Relay Payments a few months ago. And there was a bunch of heavy hitters on the risk side that were there. And they said their biggest problem by far was theft. And it's not just because the cargo itself is gone, it's because of the relationships and the trust that gets destroyed by it. So how do they protect themselves from this fraud?

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Text: CRAIG LEINAUER, DIRECTOR, INLAND MARINE CLAIM, TRAVELERS.

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CRAIG LEINHAUER: Well, so it depends on who you are, first of all, right? If you're a trucker, you're strictly liable for cargo that you accept in good condition. And if the cargo doesn't make it to delivery, then you're on the hook for the loss. But you do have some liability defenses that are available to you, but they only work really if you don't know that you've accepted cargo that was stolen, right?

So this is where paperwork is important. Drivers will often ignore discrepancies between bills of lading and load or rate confirmation paperwork. And if you overlook these kinds of red flags, then you're going to be out of luck trying to defend yourself, because you're going to be considered to have been put on notice that the cargo was, in fact, stolen when you accepted it, right?

And then, also, you have to remember this, too, as a trucker. Cargo insurance policies generally require the trucker to have physically accepted cargo for coverage to apply. So let's say, for example, an imposter uses the trucker's identity or DOT number to steal cargo, but the real trucker actually never touched the cargo or had it in its trailer. The real trucker has to have physically accepted the cargo to be liable. And also has to have physically accepted it for most cargo insurance coverage to trigger.

TIM DOONER: Now those are the carriers. What about the freight brokers that are also involved in this? Oftentimes, the freight brokers, the layer in between, they're blamed by the shipper or the carrier if something goes wrong, especially the shipper. Should they be having a laissez-faire attitude towards this? Or what should their concern be?

CRAIG LEINHAUER: Laissez-faire. Yes, well, freight brokers are unique because they really don't handle the cargo, and as such, they're really not supposed to be-- generally they're not deemed to be liable for cargo loss. But what we see increasingly is happening is that brokers, to satisfy their shipping customers, are signing contracts, right? And they're signing these contracts to make them-- that make the broker fully liable, as if they were the actual trucking company that's hauling the cargo.

So because of this, the broker can end up on the hook for really some significant loss. And often we'll see cases where brokers are notified of thefts way after they occur, because brokers are one step removed, not there when the freight is accepted or there when the freight is delivered, but then they're expected to pay for full retail value of the stolen goods without any real recourse.

In fact, I just saw a case recently where a broker was contractually liable for 60 separate stolen shipments, and each of these was valued at about $80,000 per shipment. So this added up over a few months to about roughly $4.8 million. And the broker didn't learn about these thefts until months after they were completed.

TIM DOONER: Man, Craig. We were talking earlier about the freight recession being over. So we know how sensitive carriers are to this market, and how sensitive they can be to a bill like that. Now, the freight recession may be ending, but $4.8 million can take a lot of people down. It's not pocket change. So if I'm a broker, what kind of insurance do I need so I don't get killed by that?

CRAIG LEINHAUER: Right, so two kinds of insurance for you as a broker, right? Liability insurance and contingent cargo insurance. Liability insurance is especially important for you as a broker if you're going to contractually assume liability like we're describing. But you really have to ask yourself, are your coverage limits high enough, right? Because a $250,000 policy limit on your insurance policy isn't going to cover very much of a $4.8 million strategic theft. It's just not enough insurance, right?

Secondly, in terms of contingent cargo insurance, that will cover cargo loss when the broker isn't liable but the trucker, who's strictly liable, fails to pay. But the problem is these policies will typically exclude losses due to double brokering or acts by dishonest drivers or when the cargo was released because of fraud. So as a broker, you need to really be extra vigilant to guard against these kinds of schemes.

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TIM DOONER: Well, I'm getting the picture, man. Coverage is very, very important to make this happen. What are the best practice recommendations you would have in light of all this?

CRAIG LEINHAUER: Yeah, it depends on who you are, right? I mean, if you're a trucker, there's a couple things I'll recommend. One, always make sure that the delivery address on the bill of lading matches the address on the radar load confirmation. You should confirm the delivery address with the shipper. And if there's an attempt to redirect the shipment by anybody, contact the shipper immediately to confirm that this is legitimate.

And then, secondly, if you think your identity has been stolen as a motor carrier, as a trucker, you should notify all known freight brokers that you do business with about your correct phone number and your correct email information so that they can be vigilant. So that's what you can do as a trucker. In terms of a freight broker, I would say to you, as a freight broker, you should encourage your shippers to consider uploading or emailing the signed bill of lading to the consignee as soon as the shipment is accepted by the trucker at pickup. And that way, the consignee of delivery can verify the information when the cargo arrives.

And then, secondly, you should take time to review your contracts. There's this whole, as I've mentioned, contracting into liability that you really need to be aware of. And you need to understand your liability exposure. And then, ask yourself contractually, does the other party have an obligation to let you know if there's been potentially some theft or fraud, right? Make sure that all parties to the contract agree to provide each other with notice if they suspect that a shipment is subject to theft or fraud.

And look, it comes down to this. Theft by fraud, and everybody knows this right now, is a growing industry issue. And this has resulted in huge increases in cargo loss claims. Vigilance, timely communication by everybody involved in the stream in transportation is critical to prevent these kinds of losses. And then, it also goes without saying that need to understand your liability, as well as your insurance coverage to save you and protect your business from significant financial loss.

TIM DOONER: Man, it's a scary, scary, brave new world out there. It's like it doesn't sound like in 2025 this is a topic that is going to be moving off What the Truck. If anything, it sounds like we're going to have to talk about this one even more as this problem only grows. But it pays to be informed. And these are tough things, but it's going on out there. You've got to protect yourself. You've got to protect your partners. If people want to do that, what's the best way to get in touch with someone like you or Travelers?

CRAIG LEINHAUER: www.travelers.com It's the way to go.

TIM DOONER: Bring it home. Bring it home. Well, Craig, thank you so much for your time today. Appreciate it.

CRAIG LEINHAUER: Absolutely. Have a great weekend. Have a great weekend.

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A podcast host sits at a cluttered desk on the left, with a bar of icons above: Sirius XM, YouTube, LinkedIn, Facebook, Apple Podcasts, Spotify, TikTok, and X. On the right is the Logo: What the Truck? above a list titled: Today's Show. The list includes: On Deck. Rehman Khan at Travelers. Transportation Cyber Risk Management. Rate the Strap Work. W.T.T. gear.com. The On Deck line is highlighted. Below there is a bar with the What the Truck logo on the left, and a QR code and the Logo: Nikola, on the right. At the very bottom is a runner titled: Headlines.

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TIM DOONER: Let's get us Travelers, Assistant Vice President Cyber Risk Management, it is Rehman Khan. Hello, sir. How are you doing today?

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The host's video splits with Rehman Khan's video, and the Rehman Khan at Travelers line in the Today's Show list is highlighted. The What the Truck logo in the top right turns into the Travelers logo with a red umbrella.

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REHMAN KHAN: I'm doing fabulous, Dooner. Thanks for having me again. It's always a pleasure connecting with you and attending the show, so thank you for having me.

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TIM DOONER: Well, as you saw, I kicked off the show. We went through the top issues in trucking according to carriers. And I went off that health and theft weren't on there. But here's one for you. Cybersecurity wasn't on there either, and it's Cybersecurity Awareness Month.

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Text: Rehman Khan. Assistant Vice President, Cyber Risk Management, Travelers.

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REHMAN KHAN: Yeah, that speaks volumes. And at Travelers, cybersecurity, even as a product and as our customers are dealing with this more and more, and, naturally, we are also concerned. And

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public-facing knowledge dispersion is definitely something that we take a lot of pride in. At Travelers, we actually also conduct a annual risk survey.

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The Transportation Cyber Risk Management item in the Today's Show list is highlighted.

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And the risk survey is around business concerns, what organizations are seeing, and what they're concerned with, and how, let's see, how do they respond. So if I may share some stats.

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With our recent publication of the survey, business leaders across different industries responded. And 62% of the survey respondents say that they worry about some sort of cyber incident occurring.

To make this conversation more in context, in preparation of the call, we dug in and we found out that there were 99 respondents from transportation industry. And they, too, echo the concern that cyber risk is definitely something that's going to be more and more relevant and more prevalent.

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And as we get into it, I'll share some more stats on what they have seen and what the transportation industry is dealing with in terms of cyber-attacks.

TIM DOONER: Well, yeah, I mean, I look at the data myself, and you hear the new reports, and they always get worse and worse. So none of that really surprised me. I was more surprised they just weren't on that top 10 list. That's what I was surprised about. What did you find out, though? What do you got for me from what you guys were looking into?

REHMAN KHAN: Yeah, yeah.

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So what we were seeing is basically, first of all, the index that we create, the risk index, that is trying to capture all concerns, whether it's HR, personnel shortage, artificial intelligence, technology, what have you. So we see everything.

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And, basically, cyber, last year, on that list was number six. This year, it climbed up one. So this year, it came back number five.

What we are seeing is that 65% of the respondents within the transportation industry basically said that cyber is a major concern for us. And we acknowledge it, and we are trying our level best to deal with it and put in the controls.

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This is actually 9 points higher than reported in 2023, because last year, it was reported at number six and only 56% of the respondents said that they are very concerned about it in a serious fashion.

64% of the respondents also said that we are concerned not just with cyber breaches or cyber-attacks, we are also concerned with improper disclosure or disclosure of business-relevant or very business-critical information to non-authorized personnel. And that is typically pointing towards the human element within the business organization. So we are concerned that we might have an insider threat.

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So this is very promising, and this is definitely headed in the right direction, adding to the fact that 27% of the companies that responded said that they have been, unfortunately, a victim of the attack over the last 12 months. And this has doubled. So I echo the feeling that cyber should have been on your list.

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The 27% respondents saying that they have been victimized over the last 12 months, this has doubled, by the way, from the previous year, where only 13, 14% said that, hey, we have been part of a cyber-attack. So I think the overall industry recognition of cyber concerns over time will definitely grow and it will mature. But

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the fact that 65% of the respondents said very loud and clearly, we see it, we understand, it is a concern, and we would like to do more about it, is definitely promising.

TIM DOONER: Yeah, some of these scams are pretty obvious. You can call them out usually. Right before I came on air, I got a text saying my UPS package, they needed me to update my information. Obvious kind of scam. But what are you seeing? Give us the inside scoop. What should we be looking out for?

REHMAN KHAN: So that's a great question. And what's surprising to me, someone who deals with a lot of your black hat hacking, and advanced technology, et cetera,

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Text: Rehman Khan. Assistant Vice President, Cyber Risk Management, Travelers. Headline runner text: Boeing to sunset 767 freighter program, slow 777X rollout amid strike - Boeing said Friday afternoon it will stop production of the 767 freighter in 2027, sooner than expected, and won't have the next-generation 777 dash 8 freighter ready for commercial use until 2028, at least a year later than previously scheduled, as the company looks to stem financial losses amid a month-long machinists strike.

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depending on how you look at it, fortunately or unfortunately, the attack vectors, how they're victimizing victims and industry, those attack vectors are still very manageable. They're very easy to recognize.

For example, some of the patterns that we are seeing are business email compromise. Someone sends you an email, you end up clicking on it, or you end up playing into the idea that, hey, I am so-and-so. I am trying to reach the finance department. Here's an invoice. I have not been able to reach your CFO, but could you please help me out because we are struggling on our end. We would like to pay our bills. Could you please pay this invoice? And finance department would end up paying that invoice out.

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So business email compromise. Second one is social engineering fraud or social engineering attacks. This is basically someone reaching out with ill intentions, naturally, and saying that, hey, could you please forward the funds or transfer the funds. And we are more than welcome to verify our identity. Go ahead and give me a call at this number. Here's my cell number.

And people would mistakenly call the cell number instead of calling an established chain of command or communication path, pre-established, pre-vetted, that, hey, I'm going to send you an email. Could you respond to it, like how we occasionally see our OTP when logging into our bank accounts. That one-time password would always come to your cell phone, instead of you providing at the time of authentication, that, hey, can you send me a one-time password?

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So the attack vectors remain very basic. Now, regardless of the industry, globally, we are seeing advents and deepfakes, which is basically artificial intelligence. So an attack vector that is starting to emerge more and more on the scene is called the deepfakes.

And deepfakes is basically, for instance, imagine you and I are talking. We have met before. You know what I look like, what I sound like. All I need to do as an attacker is record Dooner or Rehman and type out a script and tell artificial intelligence to replicate the voice, and the face, and the expressions, and the way the face moves, et cetera, and be able to replicate a human being, but totally command and drive how they respond.

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TIM DOONER: Yeah.

REHMAN KHAN: In real-life scenario, what we are seeing is a CFO or CEO of the company being replicated. They call their CFO, their finance person, and simply say, hey, listen, I'm on a trip. Could you please transfer the money? I need it. I need you to do it. I authorize it.

Now, the respondent could turn around and say, could you turn your face camera on? I really want to identify who you are. OK, sure. Meet me on Zoom. All right. And from that point on, that whole AI factor kicks in. The facial replication kicks in, and that's where the deepfakes are just taking over the whole hacking scene, where--

TIM DOONER:
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We're in big trouble, Rehman. They can just take this podcast, man. They already got us recorded. They got some video. Now, we're running short on time. I only have about 90 seconds, two minutes left, so tell me about some of the coverages, though. How can I protect myself?

REHMAN KHAN: Yeah, for sure. So some of the things Travelers offers is-- I'll just basically bucketize these things in three different buckets and simplify the conversation. We have pre-breach. If you're a customer, you have a policy, pre-breach is basically before you get into any kind of trouble.

We offer cyber readiness assessments. So you reach out, you talk to me, one of my colleagues, my peers within the organization,

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(SPEECH)
we also will walk through your program and we'll confirm what those security controls are, the efficacy of those controls, and, basically, whether they're effective or not.

We have a security coach line. You can call us at any time as a policyholder. We will talk to you. We'll tell you exactly what you have in coverage and how best to get through a situation if you do get into any kind of trouble in the future. We have cyber security awareness training so you don't have to pay someone to come in and train your employees, we have those training videos ready for you to grab them and plug them into your learning management system.

TIM DOONER: Excellent.

REHMAN KHAN:

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Text: Rehman Khan. Assistant Vice President, Cyber Risk Management, Travelers.

(SPEECH)
Post-breach, in the event you have been breached, we have legal counsel and defense services. We have digital forensics teams that will come in and basically walk through your environment, tell you exactly how it happened and how to prevent it in the future.

And crisis management, which is, in the event you have an issue, who should be talking to the press? Who should be talking to legal? Who do you call? Someone with a clear head and a very good understanding of the ground reality and they will walk you through.

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(SPEECH)
And last, but not the least, we have this thing called the betterment coverage, which is basically, in the event you are breached, the coverage will basically provide a one-time improvement of your current systems. As part of the coverage, we will come in and we'll say, hey, this system was weak to begin with. We would like for you to be improved.

TIM DOONER: Everyone go to travelers.com. Go check out this coverage. Thank you so much for your time today.

REHMAN KHAN: I appreciate the opportunity. Always a pleasure meeting you. Take care.

TIM DOONER: Take care.