Freight brokers can protect themselves from fraud with key steps

BOISE, Idaho — Fraud is everywhere. From credit card scams to shady deals in the freight market, it’s important to protect yourself and your business from thieves.

According to a new report from Truckstop, there has been an increasing number of scammers falsely identifying themselves to access freight or intercept loads and sell off cargo.

And while the Federal Motor Carrier Safety Administration (FMCSA) works to get more input on ways to better identify fraud in the industry and establish stronger enforcement, brokers still need to be vigilant to keep their business safe in the interim.

“Fraud cases continue to escalate as the market experiences significant fluctuations. Bad actors are getting more savvy on how they obtain information to defraud brokers and truckers,” said Julia Laurin, chief product officer, at Truckstop.

Truckstop lists the following as ways to avoid the top scams.

Cargo Theft

Cargo theft reports increased 20% in 2022, with the steepest jump in Q4 for a total loss value of $223 million, a Truckstop news release noted.

And while cargo theft is nothing new, the tactics thieves use continue to get more sophisticated. Cargo is still being physically stolen from truck stops, parking lots, warehouses, and distribution centers. But there are more strategic methods in play now. Due to the fast-paced listing and bidding process, criminals are tapping into load board technology to pose as legitimate carriers and access loads without suspicion.

There has also been a noticeable rise of emboldened thieves who continually work to find new ways to circumvent the carrier vetting process and contact brokers directly with available capacity. They then quickly get multiple loads in succession before the brokers are made aware by the customer that the cargo hasn’t been delivered. These big fraudulent hits are financially devastating and can destroy a broker’s business

Brokers can and should protect their cargo by taking extra precautions, even if it slows down processes.

Security measures to avoid cargo theft:

• Thoroughly vet every carrier, every time. Dig into all the details to ensure the carrier is who they say they are.
• Verify the carrier’s authority and DOT number.
• Confirm insurance coverage and get a copy of the insurance certificate.
• Check that the carrier is licensed to transport specific types of freight.
• Confirm the carrier’s phone number and call the carrier directly to verify accuracy before booking a load.
• Make sure the email address matches what is listed on the carrier’s registered authority.
• Improve freight visibility by using Electronic Logging Devices (ELDs) or GPS tracking to view the freight’s location in real-time.
• Refer to the FMCSA website for additional verification.
• Plan routes to avoid high-risk areas. If they are unavoidable, be sure to instruct the driver where to stop or fuel prior to avoid stops.
• Use load boards with additional data security such as two-factor or multi-factor authentication.
• Use additional security. Locks may seem unsophisticated but are an additional hurdle for thieves.
• Maintain your records of the truck, including its DOT number and VIN along with photos.
• Ask questions if something looks suspicious, like a driver using a day cab for a three-day haul.

Double-Brokering

Double-brokering happens when a carrier accepts a load from a broker and then illegally transfers, or re-brokered, the load to another carrier to complete the haul without notifying the original broker or shipper.

This can result in the cargo being transported by a carrier without proper authority, insurance, or not being delivered to its destination. It also voids the shipper’s agreement leaving all parties involved open to significant financial risks, insurance liability, and irreversible reputation damage. This can also result in the permanent loss of FMCSA authority.

Brokers may not become aware a load has been double-brokered until there is a problem. Once an accident is reported, a load arrives damaged, or payment isn’t delivered, problems occur and tracking down the guilty party can be difficult.

Over the past six months, Truckstop has tracked a 400% increase in double-brokering complaints. And in today’s down market, fraud complaints like double-brokering are only expected to increase.

Ways to detect and prevent double brokering:

• Properly onboard and monitor carriers. Bad actors can be tricky so take time to dig into details such as credit history, tenure, inspection records, and CSA scores.
• Build solid relationships. Working with carriers you know and trust decreases the risk of fraud. Create open and clear communication that benefits both parties.
• Trust your gut. If you suspect a double-brokering situation, hold payment until you can verify. Once the payment goes out, you are unlikely to recover what you’ve lost.

Protect Your Business

You are one of the first lines of defense when it comes to protecting your business. Knowing what to expect, from whom, and when will help you quickly weed out the good from the bad. And remember, trust your instinct if something looks suspicious.

Truckstop RMIS Carrier Onboarding helps you quickly and accurately qualify carriers, minimizing your risk of fraudulent activity. Get daily status updates, change notifications, and carrier directory sourcing tools to save you time and protect your business.

The Trucker News Staff

The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.