Is Fraud Inescapable in Today’s Freight Industry? 

In this article, we’ll look at the most common forms of fraud and cargo theft hitting brokers and carriers and what can be done to stop them. 

What is double brokering? 

Double brokering is an illegal activity wherein freight is reassigned from the original party to a secondary party without permission or knowledge of all parties. Double brokering typically occurs in one of two ways: 

• A shipper gives a load to a broker, who reassigns it to another brokerage for dispatch without the shipper’s consent. 
• A broker sends a load to one of its carriers, who then reassigns it to another carrier without permission. 

When a load is double brokered, it creates a plethora of potential major issues, including a lack of visibility, a risk of theft or a load being held for ransom, insurance concerns, and shattered operational trust. 

And while double brokering is not a new phenomenon in freight, it has become much more common during the freight recession since late 2022. During the end of 2022 and beginning of 2023, a prominent load board service reported that double-brokering complaints rose 400%. It’s estimated that double brokering costs the industry at large between $500 million and $700 million annually. 

What are the other common forms of fraud? 

Unfortunately, fraud schemes aren’t limited to double brokering. Other forms of fraud that commonly afflict brokers and carriers include: 

• Identity theft: Criminals posing as a legitimate registered carrier or broker using stolen information and transporting shipments under assumed identities. Fraudulent actors may also use phishing schemes, such as sending emails about “required” safety audits purportedly coming from the FMCSA. 
• Load board hacking: By a similar token, cybercriminals steal load board logins or hack the platform altogether, directing freight to illegitimate brokers or carriers who steal the load. 
• Advanced cargo theft and tracking: While traditional cargo theft can be seen as taking loads from drop lots, yards, parking lots, or truck stops, more modern cargo theft may utilize supply chain technology and location data to target specific freight and loads. 

What can be done to stop freight fraud? 

Multiple industry sources during the past couple years have reported that fraud is the “perfect crime.” While that’s not encouraging for brokers and carriers on its face, there seems to be some industry consensus on what can be done to address the issue. 

First, enforcement of existing laws related to freight fraud is currently lacking and needs improvement. The Federal Motor Carrier Safety Administration (FMCSA) recently asked Congress to give it more enforcement power to crack down on “Unlawful Brokerage Activities,” such as double brokering – and legislation has been introduced to that effect, too. Additionally, the U.S. House Appropriations Committee recently allocated money for a Supply Chain Fraud and Theft Task Force within the Department of Homeland Security.  

However, freight companies can’t reliably anticipate how the machinations of policy and law enforcement will go. But brokers and carriers do have control over who they work with, how vigilant they are, and the safeguards they put in place. 

For example, brokers can use multiple points of verification through technology and third-party software, ask carriers for ELD logs, and refuse to work with carriers who aren’t committed to other forms of transparency. Carriers can be similarly cautious about their broker partners and take extra physical security steps.  

Both carriers and brokers can collaborate with their counterparts to shut out bad actors. Additionally, industry associations, such as the Transportation Intermediaries Association (TIA), can be a good resource for countering fraud. 

Make sure fraud is less likely to affect your business 

Unfortunately, there’s no magic cure one carrier or broker can employ to eliminate the risk of fraud. But Transflo offers several products that can help address the uncertainties that lead to fraud and cargo theft. 

For brokers, Transflo Workflow AI™ slashes manual paperwork time, meaning back-offices at 3PLs and brokerages can spend more time addressing issues and inconsistencies that require human intervention. Workflow AI’s executive dashboards also give brokers a complete look at carrier and customer exceptions and actionable ways to increase operational efficiency. 

For carriers, the combination of telematics from ATI – Transflo’s telematics division – and Transflo Mobile+ offer unparalleled visibility into trucks, loads, assets, and driver workflows. Transflo Mobile+ also integrates with every major TMS platform. 

For more information on how one or more Transflo solutions can help your business tackle any of the industry’s challenges, contact our sales team today.