How carriers can fight freight fraud boom

Matt Cole:
Freight fraud and trucking has become all too common -- how fleets can avoid it. 

Jason Cannon:
Hey everybody. Welcome back. I'm Jason Cannon and my co-host is Matt Cole. Freight fraud has exploded in the 2020s with the American Trucking Associations reporting a 1,500% increase in strategic theft using deceptive tactics like ID theft, fishing and more still freight since 2021.

Matt Cole: 
ATA also reported in June that freight fraud costs the American economy up to $35 billion a year. So what can fleets do to slow those trends down? 3PL Trinity Logistics has put together a guide to help carriers avoid becoming a victim.

James Beveridge:
Training started up back in 1979. We're based in Seaford Delaware. We're a 3PL. Kind of worn a few different hats since I've been here. I was in operations for a few years. I handled some about a year or so in the compliance realm. And then as of most recently, I am in our pricing and procurement division. So I deal with a little bit of everything. A lot of experience dealing with carriers and the prevention, unfortunately, of the growing fraud issues in the industry. 

Freight fraud has definitely gotten really serious over the last couple of years. It's no longer a few bad actors as it used to be. It's almost industrialized now. We're seeing these large scale fraud rings that are utilizing anything from fake documents or spoofed identities, fake load board postings due to phishing scams. We're also seeing carriers that are purchasing MC numbers that have a good reputation that they're, because of hard times or low freight volumes are going out of business and they're selling off to these fraudsters, which has kind of given them a little bit of an edge as people are like, "Oh, I've worked with that carrier before." It's not just new carriers, it's experienced carriers and brokers alike that are being targeted every day.

The losses are exponential. It's widespread, and it's only growing faster and it's definitely one of the biggest operational threats in transportation right now. One of the things that we've done at Trinity to kind of help combat it with our carriers, we built a verification tool that's available on our website where carriers can actually go in and enter their load number and enter their MC number in, and it will tell them if it's a verified load that Trinity has them booked on just in case a fraudster that may have arbitrarily posted falsely under our name on a load board.

Jason Cannon:
With their experience in the freight market, James and the Trinity team created a guide for carriers based on ways that they have seen freight stolen through fraudulent tactics.

James Beveridge:
So we created the guide because the data that we were seeing on the rise of freight fraud was alarming. The fraud rates are rising. Everyone in the industry is being affected in some way or another, and the scams are getting more complex than they have been in the past with the inclusion of identity theft and spoof documents and all types of other digital deception. So the usual advice we kind of felt wasn't cutting it anymore and that carriers needed something real and tactical in their back pocket. So our goal with this guide is to help carriers to stop reacting to fraud after it's already happened to them and instead be able to prevent it before it starts. And we just kind of wanted to have something clear and practical, like a form of a checklist that can help them to protect themselves and protect their businesses.

Matt Cole:
James says fraudsters have gotten really good at making themselves look legit. And with freight marketplaces being largely digital, it's easier for thieves to find a victim.

James Beveridge:
The fraudsters today are doing a really good job at appearing to be legitimate, whether it be a stolen identity, vacancy, polished documents that resemble existing real rate confirmations for a broker, or like I mentioned earlier, purchasing reliable MC numbers that have a history with brokers already. So everything on the surface looks real. And the load boards, which are a great tool, have also given the scammers a huge channel to blast out fake loads quickly. And these carriers who are under pressure with current market conditions are looking to maximize utilization of their trucks want to book the trucks and keep them moving. And in that rush, sometimes they're skipping that verification process and the speed and urgency are exactly what the scammers rely on in order to be successful in these targeted attacks.

Jason Cannon:
Now when a trucking company falls victim to fraud, there's a lot more at stake than just that one lost load.

James Beveridge:
So obviously the financial loss is just one piece. So you have your direct financial loss. The carriers are also losing fuel, you're losing driver time, equipment utilization, although not getting paid for the load, but on the brokerage or shipper side, it's damaging your trust that they have in you. It's creating reputational issues to the company and even complicating further insurance or future business opportunities that you may have down the line. It's almost a ripple effect that hits every part of your operation as a carrier.

Matt Cole:
So what should every motor carrier be doing to avoid becoming a freight fraud victim?

James Beveridge:
At a minimum, verifying the broker information directly with the FMCSA site, not just what's on the load posting or on the rate confirmation, checking the email domains. A lot of these fraudsters are utilizing phishing attempts now where they're adding a letter or leaving an 's' off logistics or a slightly different domain. Making sure that those emails line up, giving the broker a phone call directly at that FMCSA filed phone number, using caution when you see high paying loads, or especially if they require minimum paperwork. 

If something feels too quick or too easy or that they're trying to rush you through it, it's usually a sign to slow down, verify, utilize the checklist to make sure that you're verifying who you're working with is actually who they say they are. The onslaught of phishing emails and things like that that are coming through from these fraudsters, taking the time to at least verify, "Hey, this email looks a little bit off," or, "Have I worked with this broker before?" Or even learning to at least utilize SAFER through the FMCSA to view the broker's snapshot to say, "Hey, this number doesn't match. Let me just give them a call." 

And I think for the older generation, something can be said for just trusting your gut. When you kind of get that gut feeling and say, "Hey, this feels off." They want to rush through. They said, "Hey, we'll do this setup packet later." Things like that, trusting your gut as well as using the technology to your best ability is definitely super important with the fraud attempts and the style that these complex fraudsters are starting to use to target these carriers.

Jason Cannon:
If your fleet does fall victim to a fraud scheme, James offers some tips on mitigating the impacts.

James Beveridge:
If it does happen, you want to make sure that you're documenting everything from the emails that are coming through to the rate confirmations if you received any. If you did move anything during the process, the GPS history of the moves from your truck, anything that kind of shows the chain of events as they've unfolded. If you can report it to the real broker, they may not know that they have a leak or an issue or a victim of a phishing scam, but you'll also want to report it to the FMCSA. They have a National Consumer Complaint Database where you can report those type of issues as well. If it came from a load board, most of these load boards have a fraud team. You'll want to report it to them as well so they can help shut it down to keep anybody else from falling victim.

And truck drivers talk. They talk to each other; they're at shippers; they're at truck stops all the time. Talk to other carriers, let other truck drivers know what's happening. Staying quiet only helps the fraudsters, while speaking up helps the entire industry. You can help protect other people from falling victim to that same attack.

Matt Cole:
Building relationships with the brokers and shippers you work with is also invaluable when it comes to fighting fraud.

James Beveridge:
I think it's a huge role in protecting yourself as a carrier from fraud. Direct relationships are going to reduce not only your reliance on the load board, which is where a lot of this fraud is happening, but you get better communication. You get a live person that you've built a relationship with where if something is feeling off, you have that trusted communication, which will give you fewer unknowns and a better feeling of security. 

Relationships are dramatically going to lower your risk versus just load board picking as you go. Having a relationship with a broker that you can call that you can say, "Hey man, I saw this load posted. Something doesn't look right, that doesn't feel right. There's 13 of them posted. The rate's $9 a mile," whatever it may be. That person is your direct line of contact. You know they work there, you know you trust them, and they're going to help to protect you because they need you as well and they want to be able to continue to utilize you and your fleet or you as an owner-operator.

Jason Cannon:
That's it for this week's 10-44. You can read more on ccjdigital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.