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How to Prevent Cargo Theft and Freight Scams in the Trucking & Logistics Industry

Cargo theft and freight fraud are on the rise into 2024. Is your business working with a logistics company that utilizes advanced supply chain fraud strategies? 

With continuously modernized technology like AI and organized criminal networks, companies and freight forwarders must invest in risk mitigation. 

Last year alone, 85% of truckers and freight brokers were being scammed by double-brokers. This same report shows that almost 56% of businesses that worked with them lost up to $50,000—and in some cases, more than $500,000. 

While these logistics industry trends are daunting, here’s how to ensure your commodities and private company data remain protected.

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Cargo Theft & Fraud Prevention Strategies to Mitigate Risks in the Logistics Industry

A graphic of a person covering a freight truck with their hands protecting it

Protecting your goods at each step during transit is crucial as a business owner. Here are the minimal supply chain fraud prevention strategies your logistics provider must utilize to mitigate these risks. 

Confirm Broker & Carrier Contacts 

In Q2 2023, 85% of freight brokers and carriers were impacted by double-brokering. Freight broker fraud, also known as double brokering, is among the most common fraud tactics in the logistics industry. Double broker fraud is when scammers use false identities, posing as secondary carriers or brokers. 

Freight brokers sometimes assign shipments to secondary carriers without the knowledge or consent of the party that owns the cargo or the original broker. Double brokers act as agents to accept and steal the cargo by taking advantage of this lack of visibility for the liaison.

If your logistics provider uses double brokers, we recommend working with another company, as it can become illegal. If the actual secondary carrier never received payment for their work due to fake double brokers, it risks legal action and a damaged professional reputation. 

If your logistics provider doesn’t use double brokers, you should also verify their broker and carrier contacts. You can search and verify their contacts via the Federal Motor Carrier Safety Administration’s (FMCSA) Safety and Fitness Electronic Records (SAFER) system.  

The SAFER database’s broker and carrier verification capabilities include:

  • U.S. Department of Transportation (USDOT) and Motor Carrier (MC) registration numbers
  • Company safety profiles and history
  • Hazmat permit registrations

For example, you may discover the USDOT registration numbers don’t match what’s posted on the load board from your “double broker.”. You can report this to your logistics provider before approving/submitting payments and prevent load-board fraud. 

Work With RMIS Carriers

RMIS stands for Registry Monitoring Insurance Services, a reputable directory of certified and insured freight carriers and brokers. It’s nationally recognized as a credible resource for consumers to search their database and confirm that the freight providers they work with are credible.

The RMIS Carrier Directory has valuable information to validate freight companies, including:

  • Cargo insurance certifications and coverage policies directly from the carrier’s insurance agent
  • Operating areas 
  • Compliance verification documents
  • Safety ratings

RMIS-registered carriers are required to verify their identities with government-issued IDs and real-time photos. This information helps prevent unauthorized users from entering your network and committing supply chain fraud. 

Enable Multi-Factor Authentication (MFA) On All Platforms

A professional entering multi-factor authentication on a phone and laptop

Cybersecurity breaches are commonly caused by weak, stolen, and repetitive passwords used for multiple accounts. Multi-factor authorization (MFA) verifies a user’s credentials to prevent data breaches and unauthorized access through a multi-step account login process. 

MFA requires users to verify themselves when they log into your operational platforms with more than your password. It typically sends verification codes or asks you to answer secret questions via SMS and email. MFA strengthens data security, especially if your logistics provider uses multiple software platforms and integrations. 

Invest in Tracking & Tracing Technology

As a business owner or leader, you should avoid working with logistics companies that don’t offer tracking and tracing technology. Most freight providers offer this as standard, so if they don’t have this technology, it may be a fake logistics company or one that needs to enhance their service security quality. 

Gaining real-time visibility of your commodities through each step in transit allows you to report suspicious activity immediately. A reputable logistics company should have tracking and tracing capabilities that give you 24/7 access so you always know where your goods are. 

Suspicious activities, like going off-route or making unplanned stops, let you contact your logistics company to resolve it urgently before it becomes a more severe security issue. 

Buy Cargo Insurance

Cargo insurance is worth the investment in the logistics industry as a consumer. Cargo insurance policies protect you from liability and fraud-related costs. You can buy air, marine, motor, rail, and all-risk cargo insurance to cover all transport modes. 

Depending on your provider and policy, cargo insurance covers:

  • Cargo theft
  • Accidental commodity damage and loss
  • Natural disaster-cause commodity damage and loss
  • Supply chain delay costs

That way, you don’t go out of pocket for supply chain fraud. 

Use Truck Fuel Cards

A truck driver paying for fuel with a fuel card

Truck fuel cards restrict transactions to fuel use only and set spending limits. Only authorized personnel can add funds and access real-time tracking of the fuel card’s spending activities. You can quickly identify and report unapproved transactions and cancel the card immediately.

Using truck fuel cards over standard debit and credit cards prevents your funds/credits from being illegally withdrawn or used—so you don’t risk losing your money.

Train All Network Staff

Ongoing cargo theft and freight fraud training for all logistics staff is essential to maximizing risk prevention strategies. Supply chain networks have various touchpoints, including administration, loaders, and truck drivers. They should have routine freight safety training to stay up-to-date on the latest scams in the logistics industry for stronger risk mitigation.

Logistics staff training should include:

  • Double-checking BOLs and rate confirmations for forgery
  • Recognizing double brokers from phone scams like fake truck crashes or fuel fund transfers
  • Identifying false invoices from a fake logistics company
  • Enhancing load-checking procedures for load board fraud
  • Training employees on all software systems to prevent cyberattacks and data breaches

Work With a Federally-Verified Freight Forwarder That Invests in Logistics Fraud Prevention 

Give your business and commodities peace of mind with a freight forwarding company that invests in fraud prevention. At Lone Star Logistics, we’re a federally licensed and non-asset-based 3PL freight forwarder. Working with a logistics company with these credentials ensures you work with a reputable and safe provider. 

Our tracking and tracing technology has timely route alerts, so you always know where your commodities are. We empower our customers with this transparency for added security measures. 

Learn more about our freight forwarding services or fill out our Shipper Request Form.  

Have questions? Lone Star’s 24/7 customer support team answers any questions you have for them! Call 833-562-3722 or contact us today! 

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