The trucking industry is currently facing a significant rise in fraud, particularly affecting brokers, as they navigate the complexities of cargo theft, which has surged by 600%.
This alarming trend has been highlighted in a new white paper from the Transportation Intermediaries Association (TIA), released on Tuesday.
According to the TIA, the logistics and transportation sector is increasingly targeted by sophisticated fraud schemes, necessitating heightened awareness and effective countermeasures.
Many brokers are experiencing challenges such as double brokering and load board scams, while a burgeoning "carrier vetting" industry attempts to mitigate these issues using algorithms and public data.
The white paper presents striking statistics, illustrating the severity of the situation. TIA President Anne Reinke characterized the freight fraud problem as "existential," underscoring its threat to the survival of freight brokers.
Thieves have become adept at increasing their haul, often targeting high-value items like electronics and solar panels. The paper notes that TIA members reported an average gross cost of fraud at $402,344.47, with a per-load cost of approximately $40,760.17.
Among the survey respondents, 43% identified "unlawful brokerage scams" as their primary concern. Interestingly, the report does not explicitly mention double brokering but includes it under broader categories of financial theft.
Brokers are increasingly adopting stricter standards for onboarding carriers and outsourcing some vetting processes to specialized companies. Many TIA members reported dedicating significant time to fraud prevention, indicating that investing in vetting services can be cost-effective given the high costs associated with fraud incidents.
To combat fraud effectively, TIA recommends practices such as verifying how long a carrier has been in business, confirming DOT registration, and ensuring the validity of contact information. Successful trucking businesses have emphasized the importance of working with trusted partners to enhance fraud prevention efforts.