Essential fraud prevention strategies for freight brokers, carriers

Cargo fraud has been on a steep upward trajectory since mid-2022. Almost 700 theft incidents were reported across the U.S. during the third quarter of 2023. This number represents a 59% increase over the same quarter last year, according to CargoNet.

Types of cargo fraud

All types of cargo fraud are on the rise. Experts believe this is due, in large part, to a combination of tough economic conditions and overall supply chain vulnerabilities. Brokers, specifically, should be especially aware of two growing types of fraud: double brokering and cyberattacks.

• Double brokering

Double brokering occurs when bad actors pretend to co-broker loads from legitimate brokers or carriers. Unfortunately, these scams run through public boards and often end with the carrier that moved the load not getting paid.

This type of fraud hurts carriers and legitimate brokers by scamming them out of money, increasing the likelihood of lost loads, compromising reputations and undermining the trust that keeps the trucking industry running.

• Cyberattacks

Cyberattacks are an increasingly prevalent issue in the trucking industry. These scams are particularly attractive to bad actors, allowing them to exploit a company without ever leaving their homes. Companies across the industry are particularly vulnerable to these scams due to the rapid adoption of technology over the past few years.

Technology growth has outpaced the introduction of holistic security practices throughout the industry, leaving brokers and carriers vulnerable to fraudsters attempting to hack into their systems, redirect freight and even steal their identities. 

How to prevent fraud

There are several steps brokers can take to reduce the likelihood of falling victim to cargo fraud. 

• Verify MC/USDOT

Simple strategies like verifying MC/USDOT numbers and integrating additional layers of security into a company’s technological infrastructure can go a long way in safeguarding against threats like double brokering and cyberattacks. 

• Use a solution like Trucker Tools

Utilizing technology to vet carriers and avoiding public load boards also makes a huge difference in reducing fraud. Brokers can take advantage of digital freight matching solutions from companies like Trucker Tools to ensure they are only working with a prequalified network of carriers. Using these tools offers carriers the peace of mind that comes with knowing that a real, verified broker represents each load.

• Build stronger carrier relationships

However, one of the most impactful things brokers can do to help prevent fraud throughout the industry is to focus on building stronger relationships with their carrier partners, other supply chain companies and third-party entities like law enforcement agencies. These relationships create a more collaborative environment throughout the industry, making it easier for individual players to protect themselves — and their partners.

While building relationships is often associated with in-person meetings and frequent phone conversations, technology can also play a pivotal role in creating strong bonds between partners.

Final thoughts

“You may think that relationships with brokers only can be strengthened with in-person interactions like handshakes and conversations at trade shows, but that isn’t the case,” according to a Trucker Tools blog post. “You can use technology to build and strengthen relationships.”

For carriers seeking to strengthen relationships with brokers, that can look like booking a load with a broker via the Trucker Tools app and then continuing to book that particular broker’s loads through the Book it Now feature after having a good experience.

Likewise, for brokers, building stronger relationships with carriers via technology can look like choosing the same partners to move your loads, even when they are not doing so at the lowest possible rates.

Click here to learn more about how Trucker Tools can help secure your operations.

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Source: freightwaves - Essential fraud prevention strategies for freight brokers, carriers
Editor: Ashley Coker