Fraud in domestic shipping is one of the biggest concerns that truckers and shippers have in the trucking industry. Yearly, brokerage fraud causes the industry nearly $800 million in losses despite being only one type of fraud. The Federal Motor Carrier Safety Administration (FMSCA) has over 80,000 complaints in its database that the FMSCA has not investigated. A lack of enforcement from the FMSCA has led to malicious actors registering as carriers or brokers. Along with impacting multiple parts of a supply chain, fraudulent activities can adversely affect the economy. This article will explain the different kinds of fraud and how to protect your shipment when they happen.
What Are Common Types of Fraud in Domestic Shipping
One of the popular kinds of fraud that a shipper or trucker should be aware of is brokerage fraud. Brokerage fraud is when an offender impersonates a real freight broker to conduct illegal activities. The Impersonator could offer a fake load to a trucker and ask for an upfront escrow payment. Then, the scammer may collect the payment and disappear or have the cargo stolen during the journey. Fraudulent brokers also scam trucking companies by offering a load considerably higher than the market price. This attracts truckers, and the broker will then collect the money without moving the shipment. Another common type of fraud is double brokering.
Double brokering is when a broker passes a shipment to a secondary broker before handing it to a valid carrier. The second broker then pockets an amount from the primary broker while the primary receives the payment from the customer. Another type of double brokering is when a shipper hires a carrier that hands the load to another carrier. The customer shipping the goods is unaware that this is taking place. The increase in internet use in the trucking industry has opened the door for cyberattacks. Carriers and brokers can be vulnerable to fraudsters hacking their systems, stealing crucial data, or rerouting shipments for theft.
How Can You Protect Your Cargo From Fraud Attacks
While it may be impossible to protect your shipment from fraud completely, you can take preventive steps. A shipper must do their due diligence before deciding on a freight broker or carrier company. This could mean verifying the MC or USDOT numbers on the SAFER and Carrier411 websites. A shipper can also call the sites’ numbers to see if the carrier is handling the load. It is also crucial that the shipper and carrier maintain communication throughout the process. If a situation like a fraud attack does happen, having insurance for your shipment can lessen the monetary loss.
Ensuring the success of your shipment is essential for individual shippers and companies. While crimes like fraud attacks may seem alarming, they should not stop you from moving your goods. Precautions like understanding what can go wrong are essential. Hiring a freight broker is another way to prepare when transporting goods. A broker connects the shipper to a prequalified carrier that can move cargo anywhere across the U.S. Reach A1 Freight Solutions at 786-375-9420 or info@a1fsinc.com to speak to our experienced brokers. We understand what can happen during domestic shipping and go above and beyond to protect your shipment.