Combatting Cargo Theft and Freight Fraud: Proven Strategies

11/24/2023 by Christine Morris

Combatting Cargo Theft and Freight Fraud: Proven Strategies

In recent years, the transportation industry has seen a concerning rise in cargo theft and fraud, and the culprits behind it are becoming increasingly sophisticated with their tactics. According to Land Line, cargo theft increased by 49 percent in the first quarter of 2020, with an average cargo loss value exceeding $105,000 per incident. In a recent report in July 2023 by CargoNet, it was found that supply chain risk events increased 57 percent year-over-year (YoY), accounting for 44 million in stolen shipments in quarter two of the calendar year.  

With such alarming statistics, it’s essential to be proactive against cargo theft and freight fraud. So that you can be fully prepared, here are some of the most common methods used by criminals in cargo theft and fraud, along with proven strategies to prevent these issues from happening in the first place.

Common Cargo Theft and Fraud Scenarios

Dealing with cargo theft or fraud when shipping freight is far from ideal. It’s even more frustrating when you realize there are many ways for individuals to commit those crimes.

1.    Identity Theft

Identity theft is currently one of the top methods scammers use to carry out fraudulent activities in the transportation industry. Scammers will impersonate legitimate trucking companies by using their stolen identities. Once they’ve acquired a stolen identity, scammers have several ways in which they use it. Some will pose as the trucking companies, show up to pick up the freight, and then disappear with the cargo. Others will request fuel advances, take the money, and vanish. Then you have others that will take it a step further and double broker.

2.    Double Brokering

Double brokering is the unethical practice when a shipper or broker books a carrier for a shipment, and the carrier then brokers or tenders the shipment to a third party without the shipper’s or broker’s knowledge or approval. Double brokering not only raises liability concerns, such as a potential lack of insurance or approved contract with the actual carrier handling your freight, but it also results in a loss of control. If double brokering occurs, it can lead to billing and liability issues for you as the shipper or the freight broker.

3.    Hook-Up-And-Go

This method of theft is precisely what it sounds like. Thieves connect tractors to trailers and simply drive away with them. These incidents typically occur at truck stops or drop yards when drivers are distracted. Although this method is less common today thanks to advanced technology and tracking systems in trailers, it’s still crucial to remain vigilant.

A graphic that reads "Common Cargo Theft and Fraud" with line icons below. There is a face mask for identity theft, a hand holding money and passing it to another hand for double brokering, and a hook for hook-up-and-go. The bottom reads Trinity's tagline People-Centric Freight Solutions and has the Trinity Logistics logo.

Combatting Cargo Theft and Fraud

When it comes to combating cargo theft and fraud, it can be challenging to know where to start. While securing trustworthy carriers is a solid initial step, several proven methods can help prevent fraud.

1.    Communicate with the Drivers

Truck drivers are your first line of defense against cargo theft. Whenever possible, ensure that the drivers you work with have undergone proper screening to minimize the risk of fraud. It’s also important to keep your driver relationships informed about any cargo theft activities so they can stay vigilant against potential threats. Keep them aware of any hijacking hotspots and encourage them to report any suspicious incidents promptly. Additionally, if you employ drivers, ensure that they have received adequate training.

2.    Verify Employment

Before finalizing any arrangements, always verify that the person you’re talking to is authorized from the logistics company they claim to work for. Use the Federal Motor Carrier Safety Administration (FMCSA) website to obtain the company’s contact information and speak to them directly to confirm their identity. If the company has no knowledge of the individual, it’s a red flag, and you’ve successfully avoided a potential scam.

3.    Check Truck Identification

Legally, every motor carrier must display their company name and USDOT or MC number on the side of their truck, found on the door of the cab. If the name on the side of the truck doesn’t match the name of the company you’ve hired or that your freight broker has arranged on your behalf, it should raise immediate concerns with your dock workers. We strongly recommend implementing a procedure that requires your loaders to inspect the door and confirm a match. If there’s any discrepancy, the truck shouldn’t be loaded until the issue is resolved. 

4.    Leverage Technology

Technology can be a powerful ally when it comes to combatting cargo theft and fraud. GPS tracking can help locate a stolen vehicle, while geofencing applications can notify you if your freight deviates from its intended route. Making use of these kinds of technology can significantly reduce the risk of any cargo theft.

A graphic titled "Combatting Cargo Theft and Fraud" with line icons below it. There are message bubbles for communicate with your drivers, a document with a check mark for verify employment, a truck for check truck identification, and wi-fi bars for leverage technology. Below that is the Trinity Logistics logo.

“Recently, Trinity Logistics had the opportunity to attend TIA’s Policy Forum in Washington, D.C. where we met with some of our elected state officials and staff,” said Kristin Deno, Director of Operational Risk. “We discussed the spike in fraud and impacts of cargo theft to the economy, which is estimated to have a cost of 800 million per year. Ultimately, these unsightly costs trickle down to the consumer, increasing the cost of goods for all. Because many double brokered or stolen loads begin with fake identity, verifying that you are communicating with the entity you think you are, is crucial. Newly created web domains and email addresses are being used to impersonate established carriers and even shipper businesses.”

Kristin Deno, Doug Potvin, and Greg Massey of Trinity Logistics attend TIA’s Policy Forum in Washington D.C.

Trust Trinity Logistics to Safeguard Your Shipments

Taking a proactive stance in fighting cargo theft and freight fraud is essential to ensure the safety of your shipments.

However, handling this task on your own can be burdensome. By partnering with a reliable 3PL like Trinity Logistics, you can save valuable time that would otherwise be spent on vetting carriers.

At Trinity, we meticulously verify all carrier relationships that we work with, not just during the initial setup, but for every shipment. Additionally, our strong relationships built with trusted carriers can further strengthen your confidence that your freight will arrive safe. Our Carrier Compliance and Carrier Development Teams are testaments to our focus on carrier verification and relationship building. We also offer cutting-edge tracking technology upon request, so you’ll know exactly where your freight is located at every step of the way.

Further, we take cases of cargo theft or fraud seriously. Situations where carriers are caught engaging in double brokering or identity theft are researched and offenders may be immediately placed on our Do-Not-Load (DNL) list.

Now, we understand that no matter what you do, things still sometimes happen. Even so, we’re proud to share that less than one percent of all shipments coordinated with Trinity Logistics end up in a claim. When that does happen, we’re just as prepared to tackle it. We have a Cargo Claims Department at the ready to assist you in navigating issues that may arise from your shipment with an average rate of 60 days in resolving cargo claims.

A graphic that is titled "Trinity Logistics: Claims Made Easy". Below that reads less than one percent of Trinity shipments result in a claim and 60 days is the average time it takes Trinity to resolve a claim. Below that is the Trinity Logistics logo.

If the possibility of cargo theft and freight fraud is keeping you up at night, then consider working with Trinity Logistics so you can gain peace of mind over your freight shipments.

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