Freight scammers seem to introduce a new fraud strategy every few weeks.
What was once considered an infrequent annoyance has become a constant burden for all parties involved in freight transportation. Brokers sense it. Carriers feel it. The fallout is handed to shippers, factoring companies, and insurers.
With millions of dollars at stake, fighting against freight theft is at the forefront of many minds. Winning the battle will take more – more expertise, more technology, and more processes.
Common Types of Freight Fraud
These days, scams are much more sophisticated than just load theft.
They have developed into complex systems that combine identity theft, double or triple brokering, borrowed MC authorities, phony relays, and fictitious disagreements over who actually transported the goods.
Fraud rings occasionally even purchase dormant MC numbers and operate under the original business name. Everything appears normal on the surface. However, there is a coordinated operation going on behind the scenes that handles stolen goods with an intent to sell a product as soon as possible.
How can one spot red flags? Look for patterns:
- Check their email signatures – call the number listed to verify it’s real or check against information available on the internet
- A carrier that goes from one truck to thirty in under a month
- Frequent changes to the phone number or address
- A carrier that claims to have no equipment but manages a sizable fleet of leased vehicles
Even when the carrier presents them as owner-operators, this arrangement frequently suggests that freight is transported through layers of unidentified subcontractors. When all is said and done, the broker is typically the one who gets burned.
The Weakest Link: Verification at the Dock
Carrier qualification is handled by the broker on paper. In real life, however, the most significant issues happen at the dock. And almost every time, the pattern is nearly identical: A legitimate carrier is assigned by a broker. When a totally different truck appears, it poses as that carrier. At the dock, a person verifies a license, looks over the paperwork, loads the cargo, and that’s it. The trailer is long gone by the time anyone notices the error.
Where’s the flaw? Simply put, a driver’s license is insufficient for verification.
Steps to Take to Prevent Theft at the Dock
- Create sign-in logs with names and MC numbers
- Have a person verify that the truck matches the designated carrier and record the VIN
- Compare all details with what the broker supplied
- Gather signatures on all documents.
Why the VIN? VINs are needed to file a claim if needed, but it’s also crucial for law enforcement. License plates can be changed in a matter of minutes, making VINs a crucial identifier.
Even for places without security cameras, there are options to avoid this. The truck, the driver, and the VIN can all be photographed by a dock worker using a company phone. Those pictures can be the difference between a covered loss and a complete write-off, and it doesn’t take long.
Does your broker verify?
Many smaller brokers hesitate to ask shippers for additional checks at the dock because they worry it makes them look unprepared. In reality, that hesitancy often results in pain.
From the beginning, verification should be perceived as a benefit. Brokers should give their dock teams basic checklists, walk shippers through their fraud-prevention procedure, and document all requirements during onboarding.
To check if their docks adhere to protocol, conduct periodic surprise tests. This proactive approach allows brokers and shippers to catch potential issues before they happen.
Incentives, Training, and Culture
Leadership can strengthen fraud prevention by building a culture that emphasizes and reinforces their training.
From the start, leadership should provide training on verification standards and dock responsibilities. Consistent internal training, clear customer education, and effective communication on every load, even when nothing seems out of the ordinary, should be the top priorities.
Is Cargo Theft Preventable?
Even when it feels scammers are ahead of the curve, there’s hope. Many scams never gain traction when identity checks, carrier vetting, and dock-level verification happen early and consistently.
Fraud prevention is most effective when it is considered by all parties as a shared responsibility, rather than a job doled out to one corner of the supply chain or another. As the industry becomes more aligned with documentation standards and operational expectations, scammers have far fewer openings to exploit.
Selecting the right Brokerage is key to transporting your goods safely. Learn more about Kenco’s brokerage team here.