Fraudulent activities within the transportation industry have witnessed a sharp increase since 2021, posing significant challenges to brokers, carriers, and shippers alike. With the majority of freight transactions taking place online through public load boards, the industry has become highly susceptible to various forms of fraud.
The fast-paced and fiercely competitive nature of the industry has created an environment where brokers have little time to thoroughly verify the identity and legitimacy of carriers. As a result two prevalent forms of fraud have emerged: double brokering and load board phishing.
Double brokering involves carriers accepting a load and then brokering it themselves without authorization. This deceptive tactic allows fraudsters to profit at the expense of brokers and shippers, ultimately leading to substantial financial losses. Approximately $700 million dollars is lost annually to double brokers.
Load board phishing, another common form of fraud, occurs when fraudsters impersonate legitimate carriers. Armed with stolen credentials and email addresses, these impersonators can siphon money away from brokers or even steal the loads entirely. The ripple effects of transportation fraud are felt throughout the supply chain, affecting everyone involved.
Recognizing the urgent need to address this escalating issue, the Transportation Intermediaries Association (TIA) took a decisive step forward. On June 9, the TIA announced the creation of the TIA Fraud Task Force, aimed at developing strategies and addressing complaints related to transportation fraud. The task force will comprise leaders from the third-party logistics (3PL) and technology industries, pooling their expertise to tackle the issue head-on.
The establishment of the TIA Fraud Task Force represents a significant milestone in the ongoing battle against transportation fraud. By implementing innovative solutions and fostering cooperation among industry players, the task force endeavors to create a more secure environment for freight transactions.