Freight Fraud: The Rising Threat and How to Mitigate Risk
Freight fraud is becoming an increasingly pressing issue in the transportation and logistics industry. According to CargoNet, freight fraud incidents in 2024 surged, with a 27% increase in cargo theft incidents compared to 2023, resulting in total losses nearing $455 million (Landline Media). In Q1 2024 alone, CargoNet documented 925 incidents, a 46% rise from the previous year, with an average stolen shipment value of $281,757, leading to estimated losses of $154.6 million (CargoNet). As fraudulent schemes grow more sophisticated, shippers must take proactive measures to safeguard their supply chains.
The Evolution of Freight Fraud
Fraud in the freight industry has existed for years, but 2024 saw a notable surge in sophisticated scams. Some of the most common types of freight fraud include:
- Double Brokering – Fraudulent brokers book a load and then pass it to another carrier without authorization, pocketing the payment while leaving shippers and carriers in the dark.
- Cargo Theft – Criminals pose as legitimate carriers to hijack loads before they even hit the road.
- Identity Theft – Scammers impersonate real carriers using stolen credentials to deceive shippers and brokers.
- Fictitious Pickups – Fraudsters arrange pickups under false pretenses, only for the cargo to disappear without a trace.
Why Freight Fraud Is Increasing
Several factors are contributing to the rise in fraudulent activities:
- Digitization of Freight Transactions – While digital platforms have streamlined logistics, they have also opened new opportunities for cybercriminals to exploit security gaps.
- Increased Market Volatility – Economic pressures and fluctuating freight rates have made businesses more vulnerable to bad actors preying on urgent shipping needs.
- Regulatory Gaps – While efforts to curb fraud are ongoing, enforcement challenges remain, allowing scammers to operate with minimal consequences.
The Role of a 3PL in Mitigating Freight Fraud
Working with a third-party logistics provider (3PL) can be a crucial defense against freight fraud. A reputable 3PL brings:
- Carrier Vetting & Compliance – Reputable 3PLs use stringent verification processes to ensure carriers have a legitimate track record, reducing exposure to fraudulent operators.
- Real-Time Load Tracking – Advanced tracking technology helps monitor shipments, ensuring accountability from pickup to delivery.
- Fraud Detection Technology – Many 3PLs leverage tools and best practices to detect suspicious activity before a fraudulent transaction occurs.
- Dispute Resolution Support – If fraud does occur, a good 3PL provides expertise in navigating claims, insurance processes, and legal actions.
Strengthening Your Freight Fraud Defense
Beyond partnering with a 3PL, businesses can take additional steps to protect themselves:
- Verify carrier credentials directly with the Federal Motor Carrier Safety Administration (FMCSA).
- Implement multi-factor authentication for freight transactions.
- Maintain strong relationships with trusted carriers and brokers.
- Educate teams on fraud awareness and best practices for securing loads.
Freight fraud is a growing concern, but shippers don’t have to face it alone. By implementing rigorous fraud prevention measures and leveraging expert support, businesses can minimize risk and protect their supply chains. At Amware, we take freight security seriously, employing robust carrier vetting and advanced tracking to help mitigate fraud risks. Contact us to learn more about how we prioritize security in logistics.