The Transportation Intermediaries Association (TIA) recently released its “State of Fraud in the Industry Report,” highlighting the growing threat of fraud in logistics and its financial toll on businesses. The report outlines prevalent fraud schemes, such as double-brokering and identity theft, and their impact on supply chains. Based on a survey of 200 members, it provides insight into regional and commodity-specific vulnerabilities and offers strategies for mitigating these risks. Key takeaways from the report:
- Increase in Fraud Incidents: Fraud cases surged by 35% in 2024 compared to the previous year, with double brokering and identity theft among the most frequent schemes and becoming more complex, causing significant financial damage.
- Double Brokering Surge: TIA members reported a 25% increase in double-brokering cases, where fraudsters pose as legitimate carriers and pass loads to unsuspecting victims. Overall, this destabilizes trust within the supply chain and results in higher costs for shippers.
- Identity Theft: Thieves steal carrier identities to establish false relationships with shippers, allowing them to fraudulently secure loads and disappear with payments. The rise in digital transactions makes identity theft easier to execute.
- Higher Freight Rates as Bait: Scammers are luring shippers with artificially inflated freight rates, resulting in millions of dollars lost to fraudulent contracts. Shippers, desperate to move loads, fall prey to these enticing offers, resulting in significant losses.
The TIA report cited that 70% of respondents indicated that industry-wide collaboration, along with improved verification systems, is essential to curbing fraud. As fraud becomes more prevalent in logistics, working with a reliable third-party logistics provider (3PL) like Fetch Freight is an effective way to mitigate risks, for secure and verified networks of carriers, comprehensive vetting processes, and real-time monitoring, reducing exposure to fraud like double-brokering and identity theft.
A partnership with Fetch Freight ensures shippers and carriers can focus on core operations while minimizing the chance of falling victim to fraudulent activities. Reach out to your rep today.