In our last article, we wrote about cybercrimes in the transport and logistics industry, and unfortunately, we need to expand on the topic because statistics show that criminals have significantly intensified their illegal activities in recent months. Fraud in road transport is an increasing problem for freight forwarders, carriers, and 3PL (third-party logistics) operators. Between Q4 2022 and Q1 2023, there was a staggering 600% increase in cargo theft, with illegal broker fraud being a primary concern. Research conducted by industry magazine CCJ indicates that, on average, victims suffered losses exceeding $40,000 per load. Fraud is becoming increasingly sophisticated, encompassing not only cargo theft but also double-brokering, phantom brokering, phishing (website impersonation), and identity theft. As many as 74% of respondents experienced at least three types of fraud, and 64% experienced at least four. This demands increased vigilance from carriers and 3PL operators at every stage of their operations.
Logistics operators, despite having a unique opportunity to prevent fraud due to their extensive contacts with carriers, must contend with the difficulty of verification and monitoring within such extensive structures. Therefore, it is crucial to implement best practices for carrier verification, including checking driver backgrounds and their companies’ histories. Driver training on fraud prevention, such as confirming changes to destination addresses, also cannot be overlooked. Introducing requirements for drivers handling high-value cargo can also be an effective preventive measure against fraud. Potential requirements include the length of cooperation with the logistics operator, the number of loads delivered, and the absence of previous cargo theft incidents.
Technologies and partnerships (e.g., with CargoNet) are helpful in tracking cargo, providing information on high-risk theft areas. GPS and dual tracking systems are utilized. For valuable cargo, additional measures such as video calls with drivers and escorts are employed.
In the face of the dynamic growth and increasingly sophisticated fraud in freight transport, which generates significant financial losses in the industry, effective protection requires a comprehensive approach. Key elements of this strategy include scrupulous verification of both carriers and drivers, systematic personnel training, implementation of advanced cargo tracking systems, rigorous application of cybersecurity practices, and active cooperation with technology partners and law enforcement agencies. Investments in the aforementioned areas are indispensable to ensure the security of transported goods and maintain operational continuity and efficiency. Finally, a few words about the mentioned and very useful company CargoNet. What they do and what is the scope of their activities.
Essentially, CargoNet’s goal is to reduce cargo theft and increase recovery rates by:
Connecting Stakeholders: Bringing together trucking companies, logistics service providers, law enforcement agencies, and insurance companies.
Information Exchange: Providing a centralized platform for real-time information exchange.
Supporting Investigations: Assisting law enforcement by providing data and analysis to recover stolen goods and apprehend criminals.
Promoting Best Practices: Educating the industry on methods for preventing cargo theft.
More information and contact at www.cargonet.com
Wishing you safe travels,
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