Small trucking operations with one to five trucks in their fleet make up the majority of North America’s trucking industry, and they’re being pillaged by freight fraudsters, said Barry Conlon, co-founder and CEO of supply chain risk management company Overhaul.
That’s one of the reasons why Overhaul recently acquired FreightVerify, a visibility platform that connects entire supply chains, from manufacturers and suppliers to transporters and distributors.
Conlon said Overhaul’s risk prevention solutions may not typically be a fit for smaller companies moving higher volumes of lower-value goods, but FreightVerify’s SaaS platform allows Overhaul to offer this risk treatment to others in the supply chain beyond haulers of high-consequence cargo across the high-tech, consumer, automotive, healthcare and life sciences industries.
“FreightVerify’s technology is very interesting because it allows us now to penetrate probably 80% of the supply chain that we're not currently getting access to,” he said. “Using visibility to solve real-world business problems, that's very much what we're doing in the risk environment, and bringing these two technologies together allows us to have access to parts of supply chains we were never given access to previously.
“Overhaul’s customers want to know which customers are affected, which orders are going to be impacted,” he added. “That kind of item-level data is what the FreightVerify platform has managed to achieve and done so successfully at scale.”
FreightVerify has mastered the item-level inventory view – down to individual products, SKUs and attributes – that many visibility players have claimed to deliver but have failed, Conlon said.
Overhaul’s capabilities already extend beyond traditional shipment tracking, but this acquisition gives its customers even greater detail with warehouse-level control over goods in motion to prevent delays and act before disruption hits.
Overhaul monitors the condition of its customers’ freight and recognizes the symptoms of damage, delay, loss or theft before it happens so it can issue corrective action to prevent it. Events that trigger the system could be something like a door open when it shouldn’t be, freight moving in the wrong direction or a temperature variation. FreightVerify’s platform has tracked more than 100 million shipments and engages 70,000 monthly active users.
Conlon said Overhaul has about $1.4 trillion in cargo value in its platform at any one time and is operating at loss ratios that are in the single digits, hovering around 7%.
“The market has evolved, and the next generation of supply chain solutions needs to address not only in-transit risk but also connect to the impact on inventory outcomes and customer experience,” he said. “Our approach ensures any delayed shipment can be linked to its contents to proactively prevent and act against downstream issues that would disrupt factories, stores and customer orders.”
The cargo theft impact
This acquisition enables Overhaul to offer its FraudWatch tool to carriers of lower-value movements, and Conlon said that will have a meaningful impact.
It’s something he said the company has already seen an increased demand for because there aren’t many effective solutions on the market, despite growing criminal activity.
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“I've been in this industry now for nearly three decades, and I've never seen the rates at levels they’re at today and even some new techniques that are being used and deployed … but especially where even legitimate companies are being duped into actually being a participant in the theft,” Conlon said.
Strategic cargo theft, he said, has increased over 1,000% in a year, according to Overhaul’s analysis.
He said criminals are operating within a vibrant world of supply and demand with huge returns.
Once upon a time, when consumers only purchased from big box stores, cargo thieves would see maybe a 10% return on a million-dollar load, Conlon said. Now, with many products delivered directly to consumers’ doors, they don’t question how it go there.
“The underlying factors, believe it or not, is us. It's the population. We're now buying our products with the sensational demand for immediacy. Criminals are just so good at imitating legitimate players that it's very hard in that fast-moving space where hundreds of loads are moving every hour,” Conlon said. “It's not like trying to find the needle in the haystack. First of all, you have to find haystack. That’s the kind of environment that these bad guys are thriving in because there is so much activity that they can disguise themselves very effectively in these environments.”
He said tools like Overhaul immediately identify the haystack.
The FreightVerify acquisition expands those capabilities.
Looking ahead, Overhaul is focused on seamlessly integrating the two organizations but plans to provide new benefits of the combined offering.
