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A group of business leaders came together to organize and raise awareness about this issue in the transportation industry.
Freight transportation fraud has been a persistent issue in the industry in recent years. During the holiday season, incidents of theft and fraud tend to increase, putting both cargo and drivers, as well as companies, at risk. On October 15th, the first Freight Transportation Fraud Awareness Day was celebrated, an event that, while it may have gone unnoticed by some, holds great value for the industry. Its goal is to raise awareness about this issue by bringing together the logistics community and policymakers to address a threat that continues to affect the freight transportation sector.
A group of industry business leaders, including Verified Carrier, Truckstop.com, GenLogs, FreightValidate, and Freight Bites, came together to organize this first awareness day. According to data shared by these organizations, it is estimated that freight transportation fraud, such as double brokering and cargo theft, costs the industry between $500 and $700 million annually. “It is a problem that affects the entire supply chain and involves all of us,” stated Andrey Drotenko, President of Strategic Relations at Verified Carrier, as reported by FreightWaves.
Freight transportation fraud: the sector’s growing threat
A recent study by Cloudflare revealed that since 2022, reports of double brokering have increased by 400%. Additionally, during the first half of 2024, cargo thefts rose by 49% compared to the same period in 2023. These rising figures are alarming for the entire transportation industry, as they result in cargo losses and payment disputes, highlighting that no authority has the resources necessary to address the problem comprehensively.
Systemic failures in law enforcement are a key factor driving the creation of Freight Transportation Fraud Awareness Day. The initiative aims to tackle this issue by bringing together industry leaders, technology providers, insurance companies, and policymakers in a joint effort against fraud. It also seeks to promote greater transparency and information flow to improve data collection and coordination among the parties involved, fostering collaboration to combat fraud more effectively.
The organizers of the Awareness Day hope that entities like the Federal Motor Carrier Safety Administration (FMCSA) will take a more active role in fighting fraud, as their current penalties are limited by legal restrictions. There are plans to extend the event to multiple days in the future and add online resources to facilitate fraud reporting and enhance efforts to combat it.
What actions can be taken now to combat freight transportation fraud?
While the initiative is promising, thefts will likely continue to rise, especially during this season. For now, it is up to fleets to implement measures to ensure the safety of both the cargo and drivers. Some actions include:
- Verifying the legitimacy of brokers: it is essential to check that the contact information of brokers and agents matches what is listed on platforms like the FMCSA website to ensure it aligns with how you communicate with them.
- Clear communication: avoid working with brokers who are unresponsive or unreliable in communication.
- Checking documentation: write your company name, phone number, MC number, and date on the Bill of Lading (BOL) before sending it. Make sure to place this information where it cannot be edited.
- Employee training: fraud prevention is crucial, so practical exercises for identifying fake documents and continuous training on scammers’ methods can provide significant support.
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