New carrier ID system aims to make freight fraud harder

Speaker 1:

The National Motor Freight Traffic Association is launching a new initiative designed to strengthen the integrity of the standard carrier Alpha code and help protect the freight industry from fraud. Hey everybody. Welcome back. I'm Jason Cannon and my co-host is Matt Cole. The standard carrier Alpha Code, or SC is a unique two to four letter identifier assigned by the National Motor Freight Traffic Association to identify transportation companies developed in the 1960s. It's crucial for tracking, billing and electronic data interchange across motor rail and water, particularly for US Customs

Speaker 2:

Sks are mandatory for freight carriers operating in the US crossing US borders and for EDI systems, and they were required by select large retail shippers as well.

Speaker 3:

The standard carrier alpha code stack, it's a unique, typically four letter identifier that is assigned, and what happens is transportation companies use it to transport cargo internationally. So what it does is it tracks the data. It could be through Truck Railroad, through the water, and so it's a unique identifier to manage the records. So it's typically, for example, on the bill of lading. So when a truck say comes in from Canada to the us, one of the things that they ask for is the SCAT code. And the SCAT code is again, part of that manifest, and the border will look at the SCAT code and the SCAT code is associated with the company. And so class eight, class non-class eight, anything that is transport and cargo needs to have that. In addition, retail requires it. So for example, Walmart and others, we know US Postal Service, one of the verification points that they have is when you haul for them, they ask for your stack code. What is your four digit code? What is your four digits stack number? So it's a unique identifier. Now it's associated again with the company, and so it's not per driver per shipment, it's per company. So you may notice if you go on a loading dock, for example, let's say you go to Long Beach or Seattle, what have you, if you look at a cargo container or a bunch of the containers on the ships, you'll see four digit codes on the side or sometimes on the back, that four digit codes of SCAT code.

Speaker 1:

Now, later this month, N-M-F-T-A will introduce an enhanced SCA verification for non-class eight carriers. Entities that don't typically hold F-M-C-S-A identifiers such as A-U-S-D-O-T or an MC number.

Speaker 3:

It's always been there for lighter duty. But what happens is when somebody calls in and gets a SCA code, what we do is we do a verification with Class eight with the Safer website. So we compare it with the US DOT data, F-M-C-S-A data. So we'll look at the MC number, we'll look at the DOT number, and that's a verification process that we use. If it's nine class eight, obviously a lot of non class eight don't have a DOT number, they don't have an MC number, but they'll be asked for a SCAT code. And so we wanted to have additional verification other than just asking specific questions. So we realized, hey, this is a gap. And the reason we realized that is number one, freight fraud. A lot of the freight fraud that's happening isn't just class eight. Number two, we had somebody that spoke at one of our meetings that talked about fentanyl and the drug trafficking and was saying, Hey, a lot of this isn't class eight.

And then of course, human trafficking, a lot of that's not through class eight. And so we're like, Hey, what can we do to really make this better? What can we do to add some additional verification? And so what we're doing is we're adding this identity verification so that for each company, they've got their license and they hold it up to their face and it compares the picture and the license to the face, and it does digital comparisons to make sure that the face and the driver's license match. And then in 42 of 50 states, it'll go back and look at the DMV record. But then also the other thing it does is it does address verification, which we thought was very important because we want to make sure that it's not a PO box, that it's not like a shipping warehouse, that it's not a storage rental facility.

It's an actual place that you can go to because that adds something to it where if there is an issue, we've got a valid address because we at times have received calls where something has happened that has resulted in a crime and maybe we've gotten a bad address. So this adds an extra layer of security that wasn't there in the past. And again, because there's not, in many cases, that data that we can go against with F-M-C-S-A, that's why we're really starting with anything other than Class eight so that we can fill that immediate gap. And if you look at, for example, a lot of the auto transporters, a lot of those are not class eight. Some of 'em are, but a lot of 'em aren't class eight, and that's where a lot of the theft happens. So it's just a gap that we're trying to fill as goods cross in and out of the United States

Speaker 2:

With cargo theft, reaching record levels just about every quarter, this added layer of could not come at a better time.

Speaker 3:

It really started, we got a call where some illegal activity happened, and it was a non-class eight, and we started asking questions. It's like, Hey, we don't have enough verification here. Wonder what we could do. And so we then took it to our members and took it to really not only the members, but we took it to the industry. This is before even we thought about the freight fraud angle, and we started talking about it and somebody was talking about the drug trafficking and started talking about all the problems they have with because the addresses and how many times it's fake addresses. So then we're like, Hmm, wonder if we could also do address verification. It just grew like that. Then we went to the cyber conference and we started to talk about it to try to gauge feedback from some of the larger carriers, but we also wanted feedback from some of the smaller carriers.

They're like, yeah, I think it's a great idea. I think it would help with freight fraud. I think if we had additional level of verification. Then we also started running it through some enforcement folks at the different levels of enforcement just to get their feedback. And the feedback was very positive, and so it's something that we decided to shift our roadmap and go ahead and do so. It was an idea that was kind of triggered by something that happened within, and so the idea came within N-M-F-T-A, but then it quickly grew because of things outside of N-M-F-T-A-S.

Speaker 1:

CCC verified officially launches on February the 26th of 2026, and S SCS for non-class eight carriers will be issued and renewed exclusively through NFTs SC [email protected] using a new verification process. There are no changes to the SC application or renewal process for Class eight carriers at this time. That's it for this week's 10 44. You can read more on ccj digital.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.