Combatting Cargo Fraud

Cargo fraud is a mounting threat in the freight shipping industry, with a 57% surge in thefts in 2023 costing businesses millions. From stolen shipments to sophisticated cyber-enabled scams, the risks can cripple unprepared companies. This guide outlines what cargo fraud entails, why it’s a critical issue, and practical steps to secure your supply chain. Let’s safeguard your freight and keep your operations seamless!

What Is Cargo Fraud?

Cargo fraud involves deceptive practices aimed at stealing goods, money, or sensitive information during shipping. Fraudsters exploit trust and vulnerabilities in the supply chain, targeting shippers, carriers, and logistics providers. Common tactics include:

• Fictitious Pickups: Scammers pose as legitimate carriers, collect a load, and disappear.
• Double Brokering: Fraudulent brokers reassign loads to unverified carriers, risking theft or loss.
• Identity Theft: Criminals impersonate reputable companies to access shipments or data.
• Cyber-Enabled Theft: Hackers use stolen credentials or phishing to reroute high-value shipments.

Why Cargo Fraud Is a Serious Threat

The freight industry thrives on trust and speed, making it a prime target for fraudsters. In 2023, cargo thefts surged by 57%, with an average loss of $586,917 per incident, driven by organized thefts of high-value goods like electronics, according to Overhaul Risk Advisory Services. Other sources, like CargoNet, report a lower average of $187,895, reflecting a broader range of incidents. The first quarter of 2024 saw a 46% increase over 2023, with an average value of $214,104 per theft. Digital platforms and remote transactions complicate verifying carriers or brokers, amplifying risks.

Steps to Protect Your Freight from Fraud

Cargo fraud poses a significant risk, but proactive measures can minimize exposure. Here are actionable strategies to secure your shipments:

1. Vet Your Partners: Verify carriers and brokers by checking their Motor Carrier (MC) number, DOT registration, and reviews on platforms like the FMCSA SAFER system and Carrier 411.
2. Use Secure Communication: Share load details or tracking numbers only through encrypted email or secure portals to prevent interception.
3. Implement Load Tracking: Leverage GPS tracking and Electronic Logging Devices (ELDs) for real-time monitoring. Automated alerts can flag unusual routing or delays.
4. Validate Documentation: Scrutinize Bills of Lading (BOL), Proof of Delivery (POD), and other paperwork for inconsistencies, as forged documents are common in fraud.
5. Strengthen Cybersecurity: Use multi-factor authentication and train staff to recognize phishing attempts to counter cyber-enabled theft.
6. Train Your Team: Educate employees on red flags like unsolicited offers, rushed deals, or upfront payment requests to boost vigilance.

How Freight SideKick Vets New Carrier Partners

At Freight SideKick, we combat cargo fraud through a rigorous vetting process to ensure only trusted partners handle your shipments:

• Initial Screening: Carriers must have been in business and held their authority for at least six months. We use tools like Carrier 411 to check for fraud, reports of double-brokering, and other suspicious activity.
• Contact Authentication: We verify the individual contact (e.g., dispatcher or driver) by calling the FMCSA-registered phone number, confirming the phone number and email of office or individual in quest.
• On-Site Verification: Approved carriers may need to send a photo upon arrival, showing the Bill of Lading against the cab of their truck with visible DOT or MC numbers, ensuring the assigned carrier is present.

This comprehensive approach closes security gaps, preventing fraud from intercepted information or identity theft.

Technology as Your Ally Against Fraud

Technology is a powerful tool in the fight against cargo fraud. Freight management platforms like Freight SideKick streamline vetting, track shipments, and secure documentation. Key technologies include:

• GPS Tracking: This enables continuous monitoring of shipments, ensuring they stay on track and alerting you to deviations.
• Electronic Logging Devices (ELDs): These devices provide real-time data on vehicle movements, enhancing transparency and accountability.
• Automated Alerts: Our systems can flag unusual routing or delays, allowing for timely intervention.

Industry collaboration, such as sharing intelligence through platforms like CargoNet, helps combat organized crime targeting high-value goods like electronics and food.

Legislative Support in the Fight Against Fraud

Recent legislative efforts are bolstering industry defenses. The Combating Organized Retail Crime Act (CORCA), introduced in 2025, expands law enforcement tools to investigate and prosecute cargo theft and fraud. Supported by the Transportation Intermediaries Association (TIA) and American Trucking Associations (ATA), CORCA aims to deter organized crime. The FMCSA’s 2025 rulemaking agenda may also introduce stricter carrier vetting, further strengthening security.

What to Do If You’re a Victim of Cargo Fraud

If you suspect cargo fraud, act swiftly to limit damage and improve recovery chances:

1. Report to Authorities: File a report with law enforcement and the FBI’s Internet Crime Complaint Center (IC3) for cyber-enabled fraud.
2. Notify Your Insurer: Contact your insurance provider to start the claims process for losses.
3. Alert Partners: Inform supply chain partners to prevent further fraud using stolen information.
4. Engage Recovery Services: Work with services like CargoNet to track and recover stolen cargo.

Stay Ahead with Freight SideKick

Cargo fraud is evolving, but with robust strategies, you can protect your freight and maintain a resilient supply chain. By outsourcing your logistics to Freight SideKick, you automatically benefit from our advanced systems and processes designed to safeguard your freight, ensuring peace of mind and operational efficiency.

Personalized Assistance

Get a quote today, call 877-345-3838, or email support@freightsidekick.com