▶ 0:03:37Here is rita. Let's update the situation in virginia, northbound 395. The crash that had the overturned vehicle
▶ 0:22:11>> good morning, welcome. The senate committee on commerce, science and transportation will come to order. Today the committee will consider two matters, promotion of lieutenant commander, nomination of steven bradbury were to be tech be secretary of transportation. That Mr. bradberry's confirmation last week I expressed dismay that in the last month there have been fatal aircraft accidents here washington, D.C., pennsylvania, and alaska and in arizona.
▶ 0:22:44This week we had another distressingly close call at chicago's midway airport when a small jet on the ground entered a runway without authorization as an incoming flight was landing. Now more than ever it's essential for the department of transportation to have officials who understand the systems they are test with managing and who can assess whether such incidents have a systemic cause. As the former general counsel of the department of transportation, Mr.
▶ 0:23:12Bradberry will bring a deep understanding of how the department and our transportation systems operate. He is intimately familiar with the department's past attempts to address transportation challenges such as aviation safety. And he has learned from his experiences. This back and will be invaluable in his new role when he's confirmed. Mr. bret baier is also a forward looking leader. My colleagues have raised questions about outside forces at the d.o.t.
▶ 0:23:41Especially in light of secretary duffy's decision to invite representatives from external organizations to visit the faa air traffic control system command center. As our nominee reminds us it is often a good thing when bureaucracy is open to new voices and ideas, to new efficiencies. Otherwise the tried-and-true approach will become tried and tarnished.
▶ 0:24:04It boggles the mind to think of an era of autonomous vehicles and artificial intelligence and yet the faa is still using paper printouts and floppy disks to manage air traffic. Mr. bradbury knows that efficiency and safety go hand in hand. Consider when exchange from the hearing last week.
▶ 0:24:26We heard that newer cars are safer cars, but after years of mandates and or regulation, cars have become so expensive that the average cars years on the road is at a record high. So I'm glad Mr. bradbury will similarly prioritize funding for infrastructure projects that provide the most benefit per dollar. Americans are calling on the political class to cut out the bloat and get back to the basics like potholes and safety.
▶ 0:24:56For these reasons and others, I support Mr. bradbury and urge my colleagues to do likewise. I turned to the ranking member
▶ 0:25:03Payment Sen. Cantwell: Thank, Mr. chairman. As you mentioned, we are here to nominate steven bradbury to be w secretary of transportation and the promotion of one coast guard officer to be commander. I support that coast guard nomination. When it comes to Mr. bradbury, I hope we understand we cannot afford a system that fails us in either the roads or in the skies. It simply doesn't matter if you are saving dollars if you are not saving lives.
▶ 0:25:33Payment Sen. Cantwell: The last thing we need is someone who won't stand up to the industry or to aviation safety needs. What brings us here today, though, is we must ask ourselves what kind of leadership will Mr. bradbury provide at d.o.t.? In his previous role, he was involved in what I would call common sense requirements that were rolled back in his time period.
▶ 0:26:03Payment Sen. Cantwell: The prevention requirements for truck drivers were loosened, a record number of rail safety requirements were waived, and most troubling, a proposed rule on safety management systems for aviation manufacturers such as boeing was sidelined. After the seven crashes, commerce committee led an investigation into the causes of the crashes and we understood that these issues of sms are very important. Mr. bradbury impeded this committee's investigation.
▶ 0:26:33Payment Sen. Cantwell: The committee's final report quote said intentionally held information requested by the committee. I believe the families of the max crashes have expressed their concerns, specifically voiced concerns about Mr. bradbury's role in withholding documents related to those crashes and voiced concern about the delays in holding bolling accountable to implementing a robust sms. During his testimony, Mr.
▶ 0:27:04Payment Sen. Cantwell: Bradbury mentioned that maybe one of the issues related to that was that smaller manufacturers didn't want those requirements but easily could have changed rolled in than to say that it just applied to large manufacturers, or could have later, after the congress passed our law requiring a new sms, he was still there and could have helped to speed up the sms process before he left.
▶ 0:27:31Payment Sen. Cantwell: I do have concerns about his issue related to conflict of interest. I should mention Mr. bradbury was there on watch also rolling back and obama era rule that said the department of defense should be required to have adsb out as a requirement. During the trump administration, there was an appeal, waiver granted to say they didn't have to turn on adsb all the time.
▶ 0:28:02Payment Sen. Cantwell: Subsequently we have found not only was that just an exemption for some time, the military than in a letter to our colleague in the house said we 100 turned it off. These are the things that get us into trouble when we don't understand the exemptions and don't understand the rules, don't understand the details of what it takes to do safety and stand up to those who are asking for those exceptions.
▶ 0:28:29Payment Sen. Cantwell: I also asked him about the relationship between elon musk and the faa, and just to tell me as a lawyer, where he would see conflict of interest. I didn't ask him if he saw one today, I asked where he thought there could be a conflict of interest. I was very disappointed in his answer because he basically said he didn't see quote the potential for a conflict.
▶ 0:28:54Payment Sen. Cantwell: I do see potential for a conflict given that spacex launch licenses are at issue and there could be times when Mr. musk could intervene and demand for lunchtime. He clearly didn't like it when he was denied that launch time and then demanded that the faa administrator be fired.
▶ 0:29:12Payment Sen. Cantwell: I also believe in the area of that so, which has -- ntsa, which has recalled 2 million vehicles over autopilot features because drivers failed on the work and ended up in crash tests , tesla said they fixed it with the software update but nhtsa is still investigating. What if Mr. musk said let's stop that investigation? I find it perplexing that Mr.
▶ 0:29:43Payment Sen. Cantwell: Bradbury could not come up with a few bright line examples of where somebody could cross the line. So I hope my colleagues will understand we have a lot of work to do on safety. I look forward to hearing the chairman has scheduled on april 2, I believe, with boeing, manufacturer from my state, to look at what we can continue to do as a committee to improve safety and work together collectively on this big priority. I urge my colleagues to oppose Mr.
▶ 0:30:12Payment Sen. Cantwell: Bradbury's nomination and I think the chairman. I yield back.
▶ 0:30:18Chair Cruz: Thank you. I will say to the ranking member, she and I are agreed on the wisdom of revisiting the exceptions to adsb out, given the tragic accident at reagan, compelling case to be made there, and we may see widespread agreement on that front. I recognize ranking member cantwell for emotion.
▶ 0:30:42Sen. Cantwell: Mr. chairman, I move that pn10, nomination of samuel have been to be the lieutenant commander, favorably reported.
▶ 0:30:53Chair Cruz: Is there a second? All those in favor say aye. All those opposed say no. The motion is agreed to. I recognize senator wicker for emotion.
▶ 0:31:06Sen. Wicker: I move that pn13-2, nomination of steven bradbury to be w secretary of transportation b favorably reported.
▶ 0:31:16Chair Cruz: Is there second? Is there any discussion? The clerk will call the roll. [roll call]
▶ 0:32:21Chair Cruz: >> yes, 15, no, 13.
▶ 0:32:26Chair Cruz: The motion is agreed to, the order is agreed to be reported favorably. I will recognize any members of the committee wishing to make remarks. Thank you for everyone being here for that markup. Ok. If there are no remarks, that concludes our executive session. We will move on to the subcommittee hearing which will convene momentarily.
▶ 0:36:28Chair Cruz: [inaudible] we are today addressing an urgent and growing concern of cargo theft on the subcommittee. Last fall ,pfl, a third party logistics company in evansville, one of indiana's transportation hubs, lost a $60,000 shipment when its cargo was stolen by a previously trusted carrier.
▶ 0:36:55Chair Cruz: For a small company, this kind of loss is absolutely devastating, one that employees and customers ultimately bear. This drives inflation at a time when inflation is top of mind of our constituents and of course undermines our rule of law.
▶ 0:37:11Chair Cruz: Pfl is just one of many companies who have fallen victim to a rising wave of cargo theft across the country and they are asking for congress to take action they want us to work together with their industry to address this threat and come up with some concrete solutions. I'm grateful to all the stakeholders present today for your participation.
▶ 0:37:35Chair Cruz: I look forward to hearing your perspectives as we consider how to respond to this threat since the covid pandemic, cargo threat -- theft has surged across the country region by some calculations a decade-long high. Once carried out by crude criminals, now with the rise of e-commerce, described domain includes sophisticated domestic and international groups from china, eastern europe, and mexico.
▶ 0:38:06Chair Cruz: They not only hijack trucks and rubber railcars but they exploit vulnerabilities in online transactions, concocting elaborate schemes, tricking businesses and third parties, stealing or holding their cargo hostage. Cargo theft is so difficult to spot and stop because it takes so many forms, from spoofing to fictitious pickups, fishing, to identity theft.
▶ 0:38:35Chair Cruz: Homeland security investigations estimates the annual loss from cargo theft "accounts for 15 to $35 billion annually." of course, these costs are ultimately shouldered by customers when retailers raise prices to cover losses. These crimes are often committed by repeat offenders, and very few, one in 10, according to the american trucking association, results in arrests.
▶ 0:39:05Chair Cruz: The federal motor carrier safety administration which is responsible for regulating motor carriers doesn't have adequate protections in place to identify fraudulent actors or remove them from its system. Nor does the agency have a statutory authority to assess civil penalties for violations of its safety for commercial regulations. At the state level, cargo theft is underreported, often mis-categorized as simple property crime.
▶ 0:39:36Chair Cruz: To effectively combat this evolving threat, we must, must modernize our safeguards. I'm hopeful that together we can begin the process of establishing and implementing those safeguard reforms today. I look forward to a productive and meaningful discussion with our witnesses. I look forward to thoughtful questions and exchanges initiated by my colleagues.
▶ 0:40:05Chair Cruz: So at this time, I will recognize ranking member peters, proud to serve with him in this capacity on the subcommittee. Mr. peters, I would like to recognize you to deliver your opening remarks.
▶ 0:40:19Sen. Peters: Thank you, chairman young, good to be with you working on this committee. I look forward to our work together in the years ahead, couple years ahead. On some very meaningful work. A lot on our plate. There are many priorities that I hope we can work together to tackle in a bipartisan way from improving roadway safety to strengthening innovation in the auto industry, to addressing issues impacting our railroads and freight supply chains.
▶ 0:40:51Sen. Peters: Working to reauthorize the surface transportation bill and deliver new roads, bridges, and other infrastructure projects to our constituents. I want to thank the chairman today for holding this hearing on cargo theft, a growing threat to american consumers and supply chains. Thanks to the witnesses for being here today. Looking forward to your testimony and how we can address this significant threat. As we will learn today, cargo theft takes many forms.
▶ 0:41:20Sen. Peters: One constant is that when goods are stolen, consumers ultimately pay the price with higher cost for everyday items. We will also here today about the consequences of theft on independent truckers and small businesses who can be driven out of business by fraudsters looking to make a buck.
▶ 0:41:39Sen. Peters: Beyond just the economic toll, I want to highlight the very real danger that cargo theft poses to transportation workers, some of whom are rail workers and truck drivers that have been threatened at gunpoint. Since 2020, cargo theft occurrences have shot up according to both industry reporting as well as agency complaints. A significant driver of this increase in cargo theft is organized transnational groups and cyber criminals.
▶ 0:42:08Sen. Peters: In fact, criminals sitting in russia, china, across the world can now steal physical cargo in the united states by setting up fake businesses and manipulating our supply chain. He will hear from our witnesses today that this is a complex, intrastate, international problem that requires more federal law-enforcement and attention. Federal bureau of investigation, homeland security investigations, U.S.
▶ 0:42:37Sen. Peters: Attorneys offices can provide the resources and reach necessary to address this organize cargo theft. However, we know the federal law-enforcement resources are stretched very thin.
▶ 0:42:53Sen. Peters: That is why I'm also the deeply concerned about trump administration's actions to get the federal bureau of investigation and the department of justice, and why I'm disappointed by the lack of pushback on this move from my republican colleagues in congress.
▶ 0:43:09Sen. Peters: Since taking office, instead of increasing federal law capacity and effectiveness, which I believe it is the first step we need to take to address this criminal trend like cargo and ron, president trump has prioritized politicizing and gutting federal law. Let me give examples.
▶ 0:43:32Sen. Peters: London, firing much of the fbi senior leadership including the head of the criminal, cyber response, services branch, which is responsible for criminal and cyber investigations worldwide. Two, firing the heads of multiple critical fbi offices. Firing dozens of prosecutors across the country for working on january 6 cases.
▶ 0:43:55Sen. Peters: In one case, forcing the resignation of six prosecutors in one day when they refuse the president's request to abuse our legal system. Three, instituted a hiring freeze, preventing law enforcement agency from recruiting new talent. You are asking for more law enforcement. There is a freeze on new talent coming into law enforcement. Four, my home state of michigan, defunding the state police by freezing resources for homeland security, terrorism prevention, and more.
▶ 0:44:26Sen. Peters: Five, reassigning doj law enforcement officers as well as homeland security investigators to focus on immigration instead of investigating issues like cargo theft, terrorism, and human trafficking. The list goes on. I don't believe these issues, law enforcement addressing cargo theft should be partisan in any way. Our freight supply chain can harm consumers, small businesses, transportation workers, and the economy.
▶ 0:44:58Sen. Peters: I'm sorry but I cannot stay quiet about the dismantling of our federal law and during a hearing where our witnesses rightly are asking for increased law enforcement response issues at hand. Just know that it is being attacked right now. Ultimately to solve the issue, I believe we need to fund the police, not follow what president trump is doing by defunding the police in my state and across the country.
▶ 0:45:23Sen. Peters: We need to make sure we have the people from field agents to prosecutors in place to deal with these complex international cybercrimes happening in the freight supply chain. This cannot happen if the attacks we are seeing at the department of justice continues. I would urge my colleagues across the aisle to join me in defending our law enforcement personnel. I also know the solutions to rising cargo theft go beyond law enforcement. The direct jurisdiction of the subcommittee, Mr.
▶ 0:45:52Sen. Peters: Chairman, I look forward to hearing from witnesses about the types of actions the federal motor carrier safety administration can take to crack down on criminal organizations impersonating motor carriers to defraud shippers as well as to steal goods. I also know that the fmcsa only resources in congress to do this.
▶ 0:46:14Sen. Peters: I hope we can work across the aisle to make that happen especially as we begin discussions about the service transportation reauthorization bill. Finally, once again, I want to thank the witnesses were being here today for your contributions to this critical national supply chains that form the basis of the american economy I look forward to your testimony. I yield back.
▶ 0:46:37Chair Young: Thank you for the opening statement, Mr. peters. We will get to our very distinguished panel momentarily. In response to your comments, your emphasis on criminal activity and making sure we enforce the laws of the land certainly well received.
▶ 0:46:58Chair Young: I do wish I had heard more from my colleagues over the last four years when the take care clause was consistently not observed by the president of the united states. We had a weekend at bernie's for four years when the president failed to enforce our border security and now we are left with international criminal elements that have permeated this country, dealing with the aftereffects of that. Perhaps we can work together on that issue.
▶ 0:47:29Chair Young: I think the people of michigan registered their opinions, as did indiana, that to secure our border. Joining us today is chief will johnson, chief special agent at the bnsf railway police department and second vice president of the international association of chiefs of police. Prior to joining bnsf, he was chief of police in arlington, texas for eight years. He has been a police officer for 31 years.
▶ 0:48:01Chair Young: Chief johnson, you are recognized for five minutes. Thank you for being here.
▶ 0:48:05Chief Johnson: Good morning, chairman young, ranking member peters, thank you for the opportunity to speak on this important issue. My name is will johnson, chief special agent for bnsf's railway and I appear as the second president for the international association of chiefs of police. The largest association of law enforcement executives. Today's testimony reflects the concerns of many police executives as they combat organized cargo theft in their jurisdiction.
▶ 0:48:36Chief Johnson: The facts are stark. Strategic cargo theft in the trucking industry has increased 1500% from 2022 to 2025, and accounts for 33% of all cargo theft reported by cargo net. The association of american railroads estimates that over 65,000 deaths occurred in 2024, representing a roughly 40% increase over the prior year.
▶ 0:49:02Chief Johnson: In many of these cases, suspects endanger the public by sabotaging rail safety equipment so they can commit their crimes. Regardless of the mode of transit, cargo theft cases often cross multiple state lines, making jurisdictional coordination, prosecution, and data collection extremity difficult. The lack of a coordinated federal cargo theft enforcement effort hinders effective prosecution.
▶ 0:49:30Chief Johnson: Food shippers have reported that criminal tampering with the chain of custody seals for U.S. food shipments has put the nation's food security at risk and also caused inflationary food prices. Finally, there are frequent reports of our in sussex engaging in takeover robberies or shooting farmers of the commission of these burglaries. In short, cargo theft is not a low-level property crime.
▶ 0:49:57Chief Johnson: We generally observed three distinct subset profiles in the commission of these crimes. Number one, transnational organized crime members. Two, loosely organized criminal street gangs in urban areas. Three, criminal opportunists. Despite the challenges that each serve these offenders represent, police officers continue to make significant arrests. It might submitted testimony, I outlined four recent examples for your review.
▶ 0:50:26Chief Johnson: The nature of these crimes have evolved over the years and a whole of government approach is required to address the challenge. Iacp doesn't believe we have all the answers to this complex problem but we urge the subcommittee and the united states congress to consider the following eight action items as a starting point for stakeholder engagement to find effective solutions.
▶ 0:50:47Chief Johnson: Number one, we support the establishment of a federal supply chain crime coordination zone, supply chain fraud and theft task force to address cargo theft in all aspects of the supply chain, to direct funding through dedicated federal prosecutors to tackle cargo theft cases, to modernize the fmcsa vetting process to include stronger authentication methods, real-time carrier verification, and it controls around the sale or transfer of
▶ 0:51:19Chief Johnson: D.o.t. And mc numbers. Increase criminal penalties for cargo theft cases and allow all victims aggregated harm to be considered in these offenses. To encourage public-private partnerships between corporate security teams, carrier monitoring services, load boards, insurers, law enforcement through data sharing initiatives. And allow the prosecution venue to be established at the place of offense. And also at the victim's U.S. corporate place of residence.
▶ 0:51:50Chief Johnson: This would allow for improved execution and reporting efforts. To provide law enforcement age and with the resources to support investigations into this complex and sophisticated criminal networks. Finally, while the united states customs and border protection has implement the changes to m bond shipment processes, there is a further need to ease the burden on crime victims by allowing cbp the authority to waive regulatory fines when cases are proven that theft had occurred.
▶ 0:52:22Chief Johnson: Again, the iacp stands ready to work with this committee and the united states congress to develop and implement these solutions and to continue to raise awareness on this important issue. I'm happy to answer any questions now or at the end of all testimony.
▶ 0:52:37Chair Young: Thank you, chief johnson for the testimony, recommendations associated with it. We will most certainly have some questions for you. Our next witness is robert, senior vice president, chief supply officer for academy sports and outdoors. Academy sports operates 298 stores in 19 states and three distribution centers in texas, tennessee, and georgia.
▶ 0:53:07Chair Young: Mr. howell brings 25 years of experience in supply chain management. We are grateful to have him here. Mr. howell, you are recognized for five minutes.
▶ 0:53:17Mr. Howell: Good morning, thank you, chairman young, members of the committee, subcommittee for the opportunity to testify today on a critical topic of cargo theft. I am robert howell, chief supply chain officer for academy sports and outdoors. I'm responsible for distribution in both domestic and international logistics. Academy is a leading sporting goods and outdoors recreation retailer headquartered in katy, texas, suburb of houston.
▶ 0:53:47Mr. Howell: We employ approximately 22,000 members across 298 stores in 19 states including texas, illinois, indiana, and ohio. We also operate dispersion centers in texas, tennessee, georgia. We were founded in 1938 in san antonio. Today, academy offers a broad assortment of outdoor apparel, footwear, sports and recreational products, including the aging national brands and a portfolio private label products. Academy's mission is to provide fun for all.
▶ 0:54:17Mr. Howell: We fulfilled his promise through a localized assortment and the value that connects a broad range of customers. During today's testimony, I hope to increase the awareness of the impacts of cargo theft. Organized cargo theft is rapidly growing. Supply chain networks both on the road and on the rail. Like many retailers, our goods are first shipped from a point of origin to our distribution centers through an intrastate network.
▶ 0:54:43Mr. Howell: This allows us to efficiently move merchandise and equip our stores with the products families want at a competitive price they appreciate, when they need them. In my 25 years in the supply chain, I've never seen cargo theft this prevalent. There has been a dramatic increase in the last two years. These types of thefts include load interception, identity theft, double brokering, and cyber fraud.
▶ 0:55:10Mr. Howell: There is a robust cargo theft network comprised of bad actors who demonstrate increasing levels of sophistication. In the past, cargo theft typically represented a bad actor stealing a truck load, obtaining a d.o.t. Motor carrier number.
▶ 0:55:26Mr. Howell: In today's environment, rapidly progressed, it is common to experience cyber theft of online credentials, and system perpetrators that cut doors on truck so don't break the security seal, fraudulently editing documents, reattaching the doors in one transaction, while eluding prosecution. Recently we had a shipment of private label swimwear intercepted on its way from nevada to our texas distribution center.
▶ 0:55:55Mr. Howell: As you can imagine, this is critical for this time of the year and the season. Unfortunately, we had to react when that was stolen and repurpose and reposition product throughout our network. You can imagine that takes incremental costs, transportation. But we had to get the product for our customers in time for the season. If we didn't get that product there, not only would our customers not be able to get the product they need to, but we risk losing that customers loyalty and losing that relationship with the customer.
▶ 0:56:25Mr. Howell: Apart from the cost of loss merchandise, there's also result in additional cost on us, shipment delays, and ultimately impact to the consumer. This type of theft can impact a variety of stakeholders. Third party service providers, brokers, carriers are attentive to the issue. When products are stolen, we are notified by third-party providers and a large investigations engage authorities, and activate mitigation teams.
▶ 0:56:52Mr. Howell: We then seek financial restitution for the cost of goods which results in loss of sales for our companies but can also be reflected in increased costs for more secure transportation. Additionally, we've had to intervene and make investments tracking and tracing technology, gps, as well as enhanced cyber security to protect that the liberty of secured information. Cargo theft also disrupts how we operate our business.
▶ 0:57:16Mr. Howell: In addition to the impact on merchandising, inventory management of a distribution center teams as they worked to replace the stolen merchandise, it also creates a need for additional time and resources to pursue the exploration and implementation of additional in-house solutions. Most importantly, once again, cargo theft impacts the customer. When goods are stolen in transit, we lose that individual sale. Potentially that customer and the ability to be loyal long-term.
▶ 0:57:45Mr. Howell: This issue exacerbated by the fact that some goods are seasonal, limited time, or limited available products and we cannot easily replenish those goods. These lost sales can reduce sales tax revenue for the local communities we serve. Partnering with industry leaders like the retail industry leaders association enables us to stay on top of best practices to help protect academy sports and outdoors.
▶ 0:58:09Mr. Howell: There is a need for greater support to inform coordination, communication with collaboration among local, state, federal agencies as well as the private sector to mitigate the impact of retailers, brokers, carriers, customers. Thank you for the opportunity to share our experience. I look forward to your questions.
▶ 0:58:29Chair Young: Thank you so much for being here. Our next witness today is adam blanchard. Mr. blanchard is principal and ceo of tanager logistics and double diamond transport. Mr. blanchard founded his companies in 2014, currently operates 90 trucks and employs over 20 freight brokers. Mr. blanchard, you are recognized for five minutes.
▶ 0:58:55Mr. Blanchard: Thank you, senator young, subcommittee members, thank you for the opportunity to testify. My name is adam blanchard, and I'm the ceo and cofounder of double diamond and tanager logistics. Our trucking company was launched after a conversation I had with a friend at my kitchen table. We put our first truck on the road in 2014 and formed our brokerage shortly thereafter. Like most small business owners, we face daily challenges, yet we were blessed with an exceptional team.
▶ 0:59:25Mr. Blanchard: Together we persevered and built a company that everyone in our organization can be proud of. We created dozens of jobs in the san antonio, texas area. Today we operate about 90 trucks and 280 trailers. A year ago, our american dream turned into a nightmare when some unscrupulous criminals stole our identity by capitalizing on our good name, tarnished the reputation we spent over a decade to earn. The scam worked like this.
▶ 0:59:55Mr. Blanchard: Posing as tanager logistics, the criminals brokered loads to unsuspected motor carriers who delivered the cargo while the scammers pocketed the money. In just one example, they diverted a full truckload of energy drinks with a retail value well over six figures over 1000 miles from texas to california. Because they spoofed my company emails, the drivers were believed -- tricked into believing that we were delivering the load.
▶ 1:00:24Mr. Blanchard: While they were using our name to enrich themselves, we were playing whack a mole, trying to counter their sophisticated techniques to mimic our website, emails, and operating equipment. Even at this very moment, two tanager logistics are listed on the fmcsa website, my company and an imposter. We provided this evidence to fmcsa but they refused to take it down. Simultaneously, we were on the receiving end of misdirected rate from motor carriers who had also been scammed.
▶ 1:00:55Mr. Blanchard: Through no fault of our own, we were blacklisted by factoring companies for fraudulent invoices and nonpayment to those motor carriers. We sought to report these crimes but kept hitting dead ends with the federal, state, and local law enforcement aid. My insurance company wouldn't get involved because technically we didn't have any cargo claims. The texas department of public safety informed us this was not their jurisdiction. He fbi recorded our information but never returned our call. The department of home and security met with us but refused to investigate.
▶ 1:01:26Mr. Blanchard: We did our due diligence but the message was clear, you are on your own. We might be on our own but we are far from alone. Cargo theft is rapidly becoming a crisis, costing the industry up to $35 billion annually. Strategic that has risen 1500% since the first quarter of 2021. The average value per theft is now over $200,000.
▶ 1:01:51Mr. Blanchard: Cargo theft comes in many forms, whether it is imitating a legitimate company, pilfering goods over time, breaking into parked tractor-trailers, or dove or program fraud. These are complex multijurisdictional crimes often involving organizational theft groups, yet there is no unified dedicated federal response. Thieves emboldened by the lack of investigations and prosecutions are growing in size and sophistication of their theft operations.
▶ 1:02:20Mr. Blanchard: But there are a few common steps we believe congress can take to counter this. First, direct fmcsa to remove illegitimate carriers and brokers from the sabre website. The industry should be able to trust that safer publicizes only legitimate entities so that we can make informed decisions when betting business partners. Second, pass the safeguard our supply chain act which would establish a federal task force dedicated to cargo theft.
▶ 1:02:52Mr. Blanchard: Hurd, pass the household goods shipping consumer protection act which with strength and penalties against bad actors and protect consumers. Currently, criminals view trucking as a low risk, high reward target. We must invert that calculus. When we were finally able to contact the thieves that stole our identity, the mere threat of law enforcement involvement was enough to deter them. The bad news is if they are not scamming us, they are scamming someone else. Trucking is a tough business.
▶ 1:03:20Mr. Blanchard: We have no shortage of grit and determination whatever industry is not equipped to deal with organized theft groups on our own. We need help from federal agencies and law enforcement with the resources and advanced technologies -- technical capabilities to take this on. We implore congress to provide resources and direction to pursue criminals who are exploiting small businesses that families spent years, decades, or even generations to build.
▶ 1:03:49Mr. Blanchard: Thank you for the opportunity to be before you today. I look forward to your questions.
▶ 1:03:53Chair Young: Thank you, Mr. blanchard. We will look forward to posing some questions. We are sorry about your troubles. You did a great job of personalizing those and making those real to us. Our final witness, lewie pugh, is the executive vice president for the owner-operator independent drivers association. Before joining -- it was close -- Mr.
▶ 1:04:20Chair Young: Pugh was a truck owner, operator for nearly 20 years, earned the million miles safe drivers award. Mr. pugh, you are recognized for five minutes.
▶ 1:04:33Mr. Pugh: Chairman young, ranking member peters, members of the committee and I am lewie pugh, executive vice president of the owner operator independent drivers association. Over 30 years in the industry. Nearly 23 of those was in small business trucking. I accumulated about two and a half million miles of safe driving. Prior to that I was a truck driver in the united states army and still hold my seat to this day.
▶ 1:05:04Mr. Pugh: Ooida we represent truckers and drivers. We have approximately 150,000 members who own about 240,000 pieces of quicken or operate. Ooida's mission is to promote and protect the interests of our members and any issues that impact their safety and success which is increasingly including freight fraud. In trucking, freight fraud is so easy to commit, it doesn't even take a savvy or experience criminal to pull it off.
▶ 1:05:33Mr. Pugh: As you can tell from this panel of professionals, everyone from shippers, motor carriers, brokers are vulnerable targets often the perpetrators of these crimes are based internationally on the far beyond the reach of the american enforcement agencies while these cases of physical theft are occurring within our industry, most of the problems small business truckers face involves being scammed by fraudsters or swindled by unscrupulous brokers.
▶ 1:06:05Mr. Pugh: There are several factors contributing to this recent exclusion of freight fraud. Week freight rates, overcapacity. We've had it with increased competition leading to greater susceptibility among small trucking businesses. Advanced technology and lack of federal oversight and enforcement has also created an environment where fraudulent actors can thrive. Unfortunately, small trucking businesses are both the most vulnerable to fraud, and the least likely to be able to recover from it.
▶ 1:06:37Mr. Pugh: Most commonly, motor carriers are held responsible for the loss of the cargo due to fraud, with costs ranging from tens of thousands to hundreds of thousands of dollars per incident. Several ooida members have lost their entire business by falling prey to the single case of freight fraud. This is not a hyperbole. It only takes one scan to completely ruin a small trucking business.
▶ 1:07:02Mr. Pugh: Fraudulent activities include double brokering, criminals posing as legitimate brokers, rerouting schemes, identity theft, purchase of authority by fraudsters, and more. Truckers are doing all they can to protect themselves but they are limited in their capabilities. For example, an ooida member doesn't have the resources to identify most of the sophisticated scammers.
▶ 1:07:28Mr. Pugh: They lacked the authority to ensure brokers are complying with existing transparency regulations, while there are systems in place to combat fraud, the federal government is struggling to provide support to shippers, motor carriers, and brokers as needed. The first step congress must take to improve this condition is passing senate bill 337 which is a bipartisan legislation introduced by senators fisher and duckworth.
▶ 1:07:56Mr. Pugh: This bill which is supported by a wide variety of industry, stakeholders gives the federal motor carrier safety administration the authority to level civil penalties against fraudsters. It also requires brokers to register with a physical address. This is something carriers have had to do for years and it's a minor change that could have a major impact on protecting motor carriers.
▶ 1:08:21Mr. Pugh: Congress must also use its oversight to ensure existing programs can help prevent a broad or better prioritize. This includes improving fmcsa's national consumer complaint database, which I have advocated for four years. Congress must also support regulatory efforts that are currently underway such as insurance compliance with the broker bond requirements and creating a new registration system.
▶ 1:08:50Mr. Pugh: Additionally, fmcsa fails to produce a final rule that ensures compliance with existing broker of transparency regulations. Congress must compel the agency to do so. Since I began my testimony, a small business tracker has likely fallen prey to fraud that could jeopardize their entire business. That is how commonplace freight fraud is becoming in trucking. We believe we have identified several critical steps congress and fmcsa must take to weed out fraudulent actors.
▶ 1:09:21Mr. Pugh: I look forward to working with these and answer your question throughout the hearing.
▶ 1:09:24Chair Young: Thank you, Mr. pugh. You bring an important perspective to this hearing, sterling safe driver record. Truckload freight we know is overwhelmingly the primary target of fraud. 98% of respondents identified truckload freight as the most vulnerable mode. This subcommittee oversees the fmcsa. I like to better understand how bad actors are requiring U.S.
▶ 1:09:56Chair Young: Dot numbers, mc numbers, and other business identifiers to carry out their illicit schemes under the guise of legitimacy. Mr. blanchard, in your opening statement, you described has a bad actor posed as tanager logistics to steels to logistics to steelsal shipments, and their company to the fmcsa electronic records, safer website to appear legit.
▶ 1:10:26Chair Young: Can you describe how bad actors are able to insert themselves so easily into the supply chain, maybe elaborate on that?
▶ 1:10:32Mr. Blanchard: Yes, they're able to do this now through a multitude of ways. We have experienced everything, from what I stated in my testimony, where they are spoofing our emails, otherwise representing themselves on behalf of our company. There were also instances out there where individuals are actually producing mc dot numbers on a black market. That is a major issue we have to address.
▶ 1:11:01Mr. Blanchard: The fmcsa must do a more efficient job, in our opinion, of ensuring they go throw those companies authorized to transport in the united states and remove those that are illegitimate.
▶ 1:11:16Chair Young: Do you have any visibility into how these purchases might occur? Is it the so-called dark web, individual criminal agents who will visit people in person and make the transactions?
▶ 1:11:31Mr. Blanchard: My understanding, senator, is this is occurring on various websites. I don't know if it is happening on the dark web but certainly on different platforms available on the internet.
▶ 1:11:43Chair Young: I don't know exactly what the dark web is. It is just this furtive thing that we hear about. For the record. [laughter] do any of our other witnesses have any visibility into how those transactions are made?
▶ 1:12:01Chief Johnson: If I might add to that, we have seen instances where companies that are going out of business, they actually auction off their numbers, similar to how they would auction off equipment they are no longer using. Individuals could buy this number through a business liquidation process, already have an established footprint, and then assume illicit operations under a previous legitimate.
▶ 1:12:31Chief Johnson: That is one example I've heard.
▶ 1:12:32Chair Young: That is an important contingency for us to keep in mind. Thank you. Back to Mr. blanchard, when you approached dot about the fake tanager logistics company listed on the sabre website, what did they say? It seems puzzling to me that they wouldn't remove the fictitious one. What did they say?
▶ 1:12:53Mr. Blanchard: When we reached out to the federal motor carrier safety administration, they informed us that unless there is a third party or another group out there that is actively using our mc or dot number, they did not have the ability to investigate any further into this other company that was representing us. The concern I had, senator, with that, we provided them with the information that we knew at the time.
▶ 1:13:21Mr. Blanchard: The individual behind the other tanager logistics, our investigation determined to be somebody from africa. We also did investigation internally and through our attorneys that determined the address listed on the sabre website provided by the fmcsa was a residential address in ohio, a woman that has no affiliation to logistics whatsoever.
▶ 1:13:44Chair Young: And you thought those overlap of facts looked suspicious, right? I can understand that.
▶ 1:13:52Mr. Blanchard: To be fair to fmcsa, there are many instances where you have companies with the same name that have operating authority in the united states. Certainly we are not here to interrupt that or ask the fmcsa to involve themselves, but there if there are facts sufficient to provide them information that there is likely an active front situation going on, we believe it would be very helpful for congress to direct them to do so.
▶ 1:14:17Chair Young: I want to get to my colleague's question momentarily but let me get to where I hope we end up with many of these lines of inquiry, which is what should congress consider to ensure fmcsa is equipped to root out rampant fraud, better support legitimate motor carriers, brokers? You listed off a number of things but maybe you could connect what we just discussed to a solution or two.
▶ 1:14:46Mr. Blanchard: What is in my opinion very important is to provide the directive and resources needed to -- in order to increase their cyber abilities. We see they are falling further and further behind in the sophistication of criminal organizations.
▶ 1:15:07Mr. Blanchard: We even have an instance in which our profile was hacked and somebody changed our address and phone number in an attempt to engage in another fraud, that fortunately we stayed on top of and could defend. Fmcsa needs to be the group that quarterbacks unified federal group of agencies in order to address these issues, in order to create a database and a repository of data so that it
▶ 1:15:39Mr. Blanchard: Can be coordinated appropriately with federal law enforcement and state law enforcement, and increasing that cybersecurity they have.
▶ 1:15:47Chair Young: That strikes me as reasonable and bipartisan and something even senator peters and I can work together on. I'm just kidding, senator peters. We are actually really good friends, leave it or not. -- believe it or not. [laughter] would any of you like to add to Mr. blanchard's suggestions about what we can do to address these situations?
▶ 1:16:17Chair Young: I know you offered recommendations in your statements, but a situation like Mr. blanchard -- do you have additional thoughts about how we could address that? And equip fmcsa to be more helpful?
▶ 1:16:38Chief Johnson: I think the question of venue is particularly important. As an individual who has focused on providing services to victims for the better part of 30 years, it is disappointing to sit with colleagues who have been victimized with no resolution. A lot of that is happening because of the venue where the offense is happening.
▶ 1:17:07Chief Johnson: The crime scene identification of a venue is often difficult to establish. To expand the venue to include the location where the business resides could help strengthen communications in the community, local, state, and federal, to help businesses effectively report challenges and bring those to the court.
▶ 1:17:32Chair Young: There is clearly not a lot of clarity when every law enforcement entity -- fbi, locals -- are reporting to somebody else. That is our job. We have to help clarify and facilitate interstate commerce. Senator peters?
▶ 1:17:51Sen. Peters: Thank, Mr. chairman. As an example of how we are friends and work together -- he took my questions, and I'm not mad at him. We are of one mind. Midwest nice, for the record.
▶ 1:18:19Sen. Peters: In your written testimony, you described the burden cargo theft template. It threatens safety generally. Can you talk more about that, how this is a safety issue in addition to a fraud problem?
▶ 1:18:37Mr. Pugh: This is a huge safety issue for truckers and small business. If they are not getting paid, they call loads. They still have to pay for maintenance and these things. If they haul a load for x amount of dollars and they have these expenses -- trucking has a profit margins. Something like this, they are out 3000, $4000. They were planning to use this for maintenance.
▶ 1:19:07Mr. Pugh: It puts a small business guy like I was into a position where you have to decide can I stay in business? Can I meet the safety regulations? They can get so bad they have to close the business and sell the truck. The real life safety aspect is most small business owner/operators have 20 years of experience. You are taking an experienced trucker off the highway, which is the people we should be keeping.
▶ 1:19:40Sen. Peters: Thank you. Mr. howell, we can all agree there is an affordability crisis in this country. Cargo theft is a direct harm for those who have invested in those goods that were stolen. The loss is very clear. Perhaps you could describe to this committee how that contributes to increases in prices across the board. This is a problem that really everyone in our country faces. Everybody in our country should be concerned about this.
▶ 1:20:14Mr. Howell: Thank you. At academy sports and outdoor, we are always focused on the individual consumer. When it comes to cargo theft, the number one concern we have is that it is a rapidly growing issue over the last two years. 50% -- we are seeing similar numbers.
▶ 1:20:45Mr. Howell: The second most concerning issue is we have never recovered any of the cargo that has been stolen. And to the best of our knowledge, nobody has ever been apprehended. So it is a growing issue. It is driving costs throughout the supply chain.
▶ 1:21:04Mr. Howell: Part of my job -- we have to find more sophisticated partners that can try to manage this more effectively. We are moving off of brokers and onto asset-based carriers, as we call them. We know that the person who is picking up does not always provide the drive.
▶ 1:21:31Mr. Howell: We have to manage sometimes double transportation around the network to recover. All of these costs affect our supply chain. Handling freight they never get paid for, with the transportation teams -- all of that ends up rolling onto us as well.
▶ 1:21:58Mr. Howell: Considering it is relatively new, I cannot tell you how much this is affecting the price, but if this continues, those costs will have to be born. -- borne.
▶ 1:22:13Sen. Peters: In cases of inbound shift -- shipment, cargo bypasses the port of shipment before undergoing a required inspection at customs. I'm the ranking member of homeland security overseeing vessel protection. I'm curious how we can deal with some of these challenges. Your testimony addresses the harm when cargo theft occurs prior to the inspection.
▶ 1:22:43Sen. Peters: If you could detail specific and additional risks associated with inbound shipments, and what actions border patrol can take to work with the supply chain to reduce this type of crime.
▶ 1:22:58Chief Johnson: Thank you. For must come up when you talk about cbp inspections, it is important to also think about homeland security investigations as the investigative authority beyond the inspection process.
▶ 1:23:19Chief Johnson: When the shipment is cleared at the port or at a location closer to the destination, once the seal is broken, we really have three risks. Number one is we know it was declared on that load that there had not been a inspection process.
▶ 1:23:43Chief Johnson: From a shipment integrity perspective, that is a point to reflect on. Having greater engagement from the investigative process, whenever there is an inbound shipment seal breach -- presently, the regulatory functions ship -- kick in, with a shipper is responsible for any fines, because the shipment arrived without its bonded seal.
▶ 1:24:14Chief Johnson: But there is no complementary terminal investigation from the federal government of what happened in that process. So the shipper is ultimately victimized twice. The product is stolen while it is being shipped, and they are facing an administrative process to have these regulatory fines reviewed.
▶ 1:24:37Chief Johnson: Presently, cbp has shared that they cannot consider waiving those regulatory fees until after the citations have been issued and the victim responds in an administrative process. So there is really a lot to unpack in that, and the complexity of those inbound shipments. But we know there are cargo proceeds that have been targeted.
▶ 1:25:10Sen. Peters: We will work with you to unpack how we can do things better.
▶ 1:25:13Chair Young: Thank you, senator peters. Senator fischer?
▶ 1:25:18Sen. Fischer: Thank you for referencing my bill. I appreciate you doing that. I appreciate the support for the bill. I think it is extremely important that we get that to move. It is the household goods shipping consumer protection act that I have introduced with senator duckworth.
▶ 1:25:39Sen. Fischer: It would allow the fmcsa to impose those civil penalties against unauthorized brokers and would require companies in the household goods sector to establish a principal place of business, to prohibit that fraudulent companies from skirting those existing regulations. I think you also for bringing up suggestions on what else we can do to be able to combat this.
▶ 1:26:11Sen. Fischer: It is eye-opening, the amount of money that harms companies, but also consumers, when we add all this together. Chief johnson, in your testimony, you reference jurisdictional concerns that often arise when investigating cargo theft crimes.
▶ 1:26:36Sen. Fischer: It is particularly important that local and state agencies have the support of the federal government when dealing with crimes that pertain to interstate commerce. In your experience, what is the relationship like between law enforcement and agencies like the fbi and the hsi when investigating cargo theft that crosses state lines?
▶ 1:27:02Chief Johnson: The short answer is, they are good relationships. The challenge is not necessarily with the relationships, but the capacity of organizations to juggle the myriad threats they are faced with. Cargo theft, historically, is not risen to the same level of attention as may some other competing interests have with these federal entities.
▶ 1:27:31Chief Johnson: It is important to understand how agencies prioritize work within their area of responsibility. That is largely a local decision by local executive leaders from those agencies involved, absent some national direction coming out of headquarters or the attorney general's office.
▶ 1:27:51Chief Johnson: I think for this topic, national direction for the task force we mentioned previously, or prosecutorial direction out of the attorney general's office, directing all of the U.S. attorneys to prioritize this issue and focus resources on effective prosecutions, will aid in the assistance of bringing these cases forward.
▶ 1:28:16Sen. Fischer: You spoke with frustration in trying to just bring it to the attention of authorities, federal, state, and I assume local as well you were trying to work with. While you mention some of your suggestions, I know Mr. pugh wanted to chime in, so I will let -- will let you chime in now. What needs to be done?
▶ 1:28:45Sen. Fischer: I don't think it is just throwing more money and being able to have more enforcement out there, necessarily. I think it is also to be able to put some teeth in what we need to do here, and just have more awareness. Anyone on the panel, but we will start with you.
▶ 1:29:09Mr. Blanchard: I'm happy to start with you. Thank you for your support of our industry and your introduction. The household goods shipping consumer protection act is certainly a great first step. As I have come to understand, currently, to piggyback off of chief johnson, the threshold established for the doj to interdict in cargo theft cases requires the incident to be at
▶ 1:29:40Mr. Blanchard: Least $1.5 million in losses. So the average loss in a cargo case is around $200,000 today. Therefore, to reach that threshold of $1.5 million is going to require law enforcement agencies to be directed to look into the continuing criminal activity of these organizations to meet that threshold, or for congress to otherwise change that and create a new directive to start pursuing these to a
▶ 1:30:11Mr. Blanchard: Unified task force, which is something we have included in the safeguard or supply chains act, it has not been filed, but I would appreciate any member of this committee to review that bill, and the willingness to author that would be fantastic. That would provide the coordination between agencies and law enforcement. I think really this begins with the fmc.
▶ 1:30:37Mr. Blanchard: To further elaborate on senator young's question earlier -- we have to start with them. I think to your point, senator fischer, showing money at the problem, I would agree, is not the solution. First, we need congress to direct fmcsa on the things that need to occur in the coordination necessary to address this very issue we are dealing with. They need to be able to distinguish between fraud is nessus and legitimate businesses.
▶ 1:31:07Mr. Blanchard: The enhanced cyber capabilities and greater interagency collaboration with law enforcement to identify these problems -- they need to be directed to remove fraudulent companies from the website. We rely on that to be able to vet companies we work with. They need to explicitly authorize -- they need to explicitly authorized to withhold registration from applicants who fail to provide verifications.
▶ 1:31:38Mr. Blanchard: Also, congress, we believe, should conduct rigorous oversight with the transition to a single d.o.t. Number, which they are considering doing. Without placing undue burden on legitimate carriers, d.o.t. Should implement recommendations issued by the government accountability office to strengthen the national consumer complaint database.
▶ 1:32:01Mr. Blanchard: Those are things we believe congress can do without the necessity of additional funding, in order to provide the coordinated effort necessary for law enforcement, because we simply don't have the tools to do the reverse ip searches, to break through the cyberspace and find out who is spoofing our emails. I have a very sophisticated I.t. Director. He is great. But only law enforcement agencies have that capability.
▶ 1:32:29Sen. Fischer: Can Mr. pugh respond as well?
▶ 1:32:34Chair Young: Go ahead.
▶ 1:32:37Sen. Fischer: Since both you and senator peters went over time, cannot I?
▶ 1:32:41Chair Young: You are correct.
▶ 1:32:43Sen. Fischer: And thank you for your support.
▶ 1:32:46Mr. Pugh: Thank you senator fischer, and senator duckworth. We appreciate your trained to do something different to help these things. It will pay dividends if we can get it across the finish line. A couple other things -- this whole national complaint database -- fmcsa needs to be directed more to do something with that.
▶ 1:33:08Mr. Pugh: From our experience and what our members, can you set the complaints plus many other complaints that ppen in trucking? It seems this is where all complaint's to die with fmcsa. If they get anything, it is just thanks for letting us know. We have said for a long time it would be helpful to have a different name. West of our small business people, truckers, they do not even realize this is a place for them to go file a complaint.
▶ 1:33:40Mr. Pugh: Who would think that was a trucking complaint online? That would be helpful. We feel there are enough funds to do some investigating on this. It is just to reallocate where they are putting it. They continually say there is not a safety effect for this where they do not have to do anything with this. It is putting people out of business, causing people to maintain their equipment.
▶ 1:34:10Mr. Pugh: There is definitely a safety thing here. Who knows what happens to a trucker? Something happens at gunpoint or something like that. The first line of defense on this, 100%. They have all this information. They have everybody's registrations. Fmcsa will take a long look at barriers of entry to being a motor carrier or a broker. It needs to be much stricter.
▶ 1:34:42Mr. Pugh: We need to file for insurance, pay for it. No idea if they know what they are doing. Maybe 12, 18 months.
▶ 1:34:51Chair Young: Thank you. All of these concrete and actionable recommendations have been very helpful. All of us up here -- Mr. luma?
▶ 1:35:03Sen. Lummis: Thank you very much. My state is home to a number of ports, including santa teresa port of entry, which is a transit hub that has been a major site of economic growth in recent years. At santa teresa, we are experiencing trucking theft on the mexico side of the border, meaning the products businesses and consumers are waiting for never make it into the united states.
▶ 1:35:33Sen. Lummis: Do you think it is important for the U.S. law enforcement to courtney with mexico?
▶ 1:35:37Chief Johnson: Absolutely.
▶ 1:35:40Sen. Lummis: Cargo theft amounts to $35 billion in losses annually. These thefts impact our truckers, railroads, agricultural producers, businesses big and small. They also impact consumer prices which are currently on the rise. When the entire industry experiences regular thefts on merchandise, does it affect the prices consumers see? >> senator, yes. It eventually will.
▶ 1:36:10Sen. Lummis: Chief johnson, you said that state-level prosecution efforts are challenged by a tremendous number of competing priorities for resources. This focus has either directly or indirectly affected concrete crime enforcement efforts. They have supported this vulnerability. Do you think they need more or less resources to address the full slate of challenges in her community?
▶ 1:36:41Supple -- Chief Johnson: Local law enforcement needs more resources directed toward this. As we look at the three offender profiles, the transnational organized crime has the greatest federal nexus. You look at the criminal street game profile and their opportunists, those are the most directly targeted by law enforcement efforts.
▶ 1:37:08Supple -- Chief Johnson: And certainly having the capacity and communities to address cargo theft related crimes at a local level with state charges would be tremendously, mentally to the federal response that has been discussed.
▶ 1:37:18Sen. Lujan: You were a law enforcement officer at the local -- do you think law enforcement being reduced at the local level could make this worse?
▶ 1:37:30Chief Johnson: Absolutely. This is a national challenge. Surveying our members, we believe that across the nation, many agencies are experiencing a 10 to 15% vacancy rate in terms of positions they have available that are unbuilt.
▶ 1:37:56Chief Johnson: In a complete society, the opportunity to recruit and retain officers to strengthen the security of our communities. Suppler joan I introduced an amendment to provide increased resources for local law enforcement with initiatives such as the cops hiring program. I was surprised when not one of my republican colleagues voted for it.
▶ 1:38:21Chief Johnson: This is a bipartisan area that we should be working together to find there is more resource available to higher, secure, keep, and recruit all the folks we need. I appreciate that response. Esther blanchard, advanced technology is one of our tools, which is why I have advocated for 100% screening using nonintrusive inspection technology at the southern border.
▶ 1:38:49Chief Johnson: Do you believe we should implement technology at our ports of an?
▶ 1:38:54Mr. Blanchard: I do. Suppler john reports indicate fentanyl precursor -- suppler
▶ 1:39:04John -- Sen. Lujan: Fentanyl precursor drugs are making their way to us from mexico. Would inspecting cargo entering the U.S. enhance our ability to disrupt this supply chain?
▶ 1:39:18Mr. Blanchard: We don't do much cross-border freight. But certainly we have always as an industry supported more inspections so it is not -- so long as it is not over burdensome. The technologies provide increased efficiency with advanced throughput on those inspections.
▶ 1:39:43Mr. Blanchard: I personally certainly would be -- myself and on behalf of my company, we would welcome it. We want to get that actors out of our industry. Any advanced technologies that could provide assistance to law enforcement --
▶ 1:40:02Sen. Lujan: The importance of technology that is not going to slow down commerce what will let us get a view of what is leaving the country with some of these precursor chemicals that are rolling through the united states and going to mexico, or the bad stuff that is going in. I'm surprised with the low number of passenger vehicles that are actually screened entry in the united states, and reports coming out of the department of homeland 90% of the fentanyl being found in the U.S.
▶ 1:40:31Sen. Lujan: Is coming across the southern border in passenger vehicles being driven by americans. We have got to stop this stuff. The only way to stop it is to see what is in a vehicle. Mr. blanchard, one final question.
▶ 1:40:50Sen. Lujan: The importance of the work that is needed to ensure that we are keeping the night on the bad folks, and that there is actually something being done with federal staff, experts, things of that nature -- to hold people accountable to prosecute, would that require more staff or less staff?
▶ 1:41:16Mr. Blanchard: I'm not in a position to know whether we would need more or less staff. A reason I don't know if there is sufficient law enforcement as we sit here today is because there has not been any directed by congress to assign agencies to look into these cargo thefts and cargo issues.
▶ 1:41:39Mr. Blanchard: I am of the personal belief that we really need congress to direct these agencies to start investigating this. That is why we need the supply chain act to work in coordination to begin to investigate these claims, so we can stop prosecuting and convicting these bad actors out here.
▶ 1:42:03Mr. Blanchard: Currently, from what we can tell -- without recourse, going into these criminal activities -- I believe we should start there. I think it would be very logical that as we begin that process that the gravity of the situation and the severity of what we are experiencing in the industry likely would require some additional resources for some of these federal law enforcement agencies.
▶ 1:42:30Suppler John -- Sen. Lujan: I appreciate that. And the research staff has done in this space. This is something congress needs to get done. We can work together on this. We can work with the international crossings as well. I very much appreciate this hearing you have scheduled.
▶ 1:42:52Chair Young: Thank you for your questions, senator. I agree this panel has been outstanding. I would like to read into the record some compelling staff work that I think needs to be read into the record, related to international organized crime and the nexus they have with this challenge that we are discussing in this hearing.
▶ 1:43:25Chair Young: Law enforcement investigations have found international criminal organizations have strong ties to eastern europe and south asia. For years, large-scale theft rings have been linked to armenian games. Who use a mixture of straight and strategic cargo theft to steal freight. One stakeholder reported their load was stolen by an armenian gain -- gang operating in california and resold to a colombian crime ring.
▶ 1:43:55Chair Young: Additional reports indicate a more organized crime ring from india, referred to as the syndicate, operating in both the U.S. and canada while using the name singe. In 2023, canadian officials conducted an investigation dubbed project big rig that disrupted the operations of this crime ring by arresting 15 individuals running a major cargo theft ring.
▶ 1:44:27Chair Young: Canadian authorities recovered over $9 million in stolen goods. It goes on and on. They have presence in ohio. Investigators have also found ties to the mexican cartels and cargo theft rings.
▶ 1:44:42Chair Young: On january 13 of this year, over four and $40,000 worth of nike shoes were stolen off of a bnsf train whose air brakes were cut as it traveled on tracks north of phoenix, arizona. Federal officials have leaked this to a cartel operating out of sinaloa. 11 men were arrested. Nine of the men were in the united states illegally.
▶ 1:45:11Chair Young: The other six are residents of similar. -- of sinaloa. These attacks have increased over the past two years. I just find that connection compelling. Sometimes, I like to connect the work we do in this committee, or in particular subcommittees or committees with conversations we have in other committees.
▶ 1:45:39Chair Young: This is linked to border security in various ways. I would also note that my colleagues emphasis on resources is important and in many cases correct. I would say if we are going to look callista clear at this challenge, we should also look at the limitation we have on federal judges, so that if you do identify bad actors, you need to be able to get into court over a reasonable period of
▶ 1:46:09Chair Young: Time, and not wait years and years to have your case heard. Otherwise, the law is of little effect. We have got some work to do. The judges act is neither here nor there. But there was a veto, for those checking your recent record, by our last president, in the final days of his administration. It seemed to be fairly partisan, vindictive reasons.
▶ 1:46:42Chair Young: Are there any additional connections to international cartels that our witnesses feel like we should be making? Or any reflections you have on that issue that you would like to get on the record? I will ask chief johnson.
▶ 1:46:57Chief Johnson: Thank you for the opportunity, and I would like to complement steph's research that was read into the record with one additional point of clarity. I would like to thank the men and women in the police force that are on the front lines every day, challenging these bad actors. The arrests he referenced where the result of their hard work and connecting federal authorities to their investigations. I'm very proud of the work they are doing to protect the U.S.
▶ 1:47:28Chief Johnson: Supply chain, and also our customers' goods and services. The concept of the transnational organized crime has been well covered. The mexican national nexus for rail freight is the strongest eastern european, certainly armenian in the trucking industry, very pronounced, and having the ability to have a federally directed task force in
▶ 1:47:59Chief Johnson: The united states attorney's office is the only way your going to p into these organized networks and this command and control that is taking place. They cannot keep arresting the bad actors every day. Until we take out the command-and-control of these organizations, this crime threat is going to persist.
▶ 1:48:22Chair Young: Mr. blanchard?
▶ 1:48:25Mr. Blanchard: To expand on those comments -- and I will add I thank your staff and the rest of the senior staff, and the diligent research they did. There are things I was not even aware of.
▶ 1:48:39Mr. Blanchard: One thing I wanted to bring to this committee's attention is that because these actors and these organized criminal groups are acting with impunity, because there is no real long enforcement effort to stop them, I feel certain this is a crime that is occurring.
▶ 1:49:01Mr. Blanchard: Cargo theft is generating a tremendous amount of revenue for these criminal organizations that are, in turn, engaging in other criminal activities. This seems to be a moneymaker for these bad actors that I'm sure are engaging. They are certainly engaging in other criminal activity.
▶ 1:49:22Chair Young: This is probably one of many streams of revenue for these criminal elements. Point well taken.
▶ 1:49:31Mr. Pugh: My stuff takes a lot of these calls from our members. We get calls weekly on this. 120,000 members. We have seen -- we are sure some of these folks are from other countries. Stretching our border. Some domestic. We have a lot of people in the beginning and a certain area of southern california, north of l.a., that this was being traced back to.
▶ 1:50:00Mr. Pugh: Since then, we have found and uncovered these bad actors. There will be eight or 10 of them using the same address. They shut down and come back with the same address. I'm sure this is both foreign and domestic.
▶ 1:50:18Chair Young: We have come to the end. We have covered a lot of ground. I would welcome any additional submissions or points that you wanted to bake. You can submit those to the committee in writing. We can keep the record open for a short period of time to accommodate any of that.
▶ 1:50:43Chair Young: My hope is that we will take your recommendations and see where we can come to some measure of consensus, and then act on those recommendations that can sometimes be challenging. I agree with senator peters this is one of those issues that lends itself to common sense and action right now, and the american people deserve it. Senators will have until the close of business on thursday, march 6, to submit questions for the record.
▶ 1:51:14Chair Young: And the witnesses, I am informed by a very diligent and competent staff, have until the end of the day on thursday, march 20, to respond to those questions for the record. This concludes today's hearing. The committee stands adjourned.