How To Identify A Freight Scam — And Why Brokers Are Your Protection

Introduction:

An Outbreak of Criminality in the Freight Sector

Unscrupu­lous freight com­pa­nies are pro­lif­er­at­ing, and they report­ed­ly cost the U.S. sup­ply chain as much as $35 bil­lion each year. From car­go theft to iden­ti­ty theft, such scams con­tin­ue to grow more sophis­ti­cat­ed.

Understanding Freight Scams

What Are Freight Scams?

Freight ripoffs include a vari­ety of illic­it activ­i­ties such as theft, iden­ti­ty theft, and dou­ble bro­ker­ing. These frauds abuse the sup­ply chain and result in seri­ous mon­e­tary dam­ages.

Common Types of Freight Scams

• Car­go Theft: The theft of ship­ments in tran­sit, fre­quent­ly high­er-val­ue goods such as elec­tron­ics or house­hold prod­ucts.

• Iden­ti­ty Theft: Scam­mers fake well-known busi­ness­es and use their names to steal ship­ments.

• Dou­ble Bro­ker­ing: A car­ri­er bro­kers a load with anoth­er car­ri­er or oper­a­tor with­out the shipper’s knowl­edge; this fre­quent­ly results in dis­agree­ments over how a load should be paid for.

• Fake Pick­ups: Thieves claim to be legit­i­mate car­ri­ers, load the freight, and dri­ve away with it.

What Brokers Can Do To Prevent Freight Scams

Freight bro­kers func­tion as the go-betweens for ship­pers and car­ri­ers, and also make sure both are rep­utable and reli­able. They check car­ri­er cre­den­tials and con­trol, man­age, and pay ship­ments through a secure envi­ron­ment.

If you’re look­ing to work with a vet­ted freight bro­ker­age, con­sid­er The Amer­i­can Truck Inc. — a trust­ed name in the logis­tics and freight space.

How Brokers Are Safeguarding the Supply Chain

• Car­ri­er Ver­i­fi­ca­tion: Bro­kers screen car­ri­ers by ver­i­fy­ing their USDOT num­bers, insur­ance, and safe­ty records.

• Track­ing Ship­ments: They have a real-time sys­tem for mon­i­tor­ing ship­ments which means your goods will arrive safe­ly.

• Pay­ment: Bro­kers facil­i­tate the pay­ment trans­ac­tions between ship­pers and car­ri­ers, min­i­miz­ing the chance of any finan­cial fraud.

Red Flags in Identifying a Freight Scam

• Exces­sive­ly Low Rates: If the rate is unheard of, it’s prob­a­bly not log­i­cal.

• Absence of Record: Any miss­ing or incon­sis­tent doc­u­ments are a tip-off that fraud may have been com­mit­ted.

• Unli­censed Car­ri­ers: If the car­ri­ers do not have the appro­pri­ate licens­es or his­to­ry, it should be a cause for con­cern.

• Demand for Urgent Action: Fraud­sters fre­quent­ly explain that they “need” an imme­di­ate response to pre­vent being caught.

• Unpro­fes­sion­al Con­ver­sa­tions: Gener­ic emails or unclear mes­sages about load details are some­times a sign of fraud.

Case Study: The Incident of the Flycatcher

Fly­catch­er, a toy com­pa­ny, lost more than $1 mil­lion of mer­chan­dise in a freight scam in 2024. Thieves posed as legit­i­mate truck­ing com­pa­nies, took cus­tody of the goods, and deliv­ered them to unau­tho­rized loca­tions. This event under­scores the val­ue of prop­er car­ri­er val­i­da­tion, and also of the bro­kers against whom we should guard to pro­tect our­selves from hav­ing an ordeal like this stolen haul­ing scam.

For a break­down of sim­i­lar inci­dents and how to pre­vent them, refer to this arti­cle by Freight­Waves.

Best Practices for Shippers

• Uti­lize Reli­able Bro­kers: When work­ing with trust­ed bro­kers the risk of falling prey to freight scams is fair­ly low.

• Con­firm Car­ri­er Details: Nev­er over­look the USDOT num­bers, insur­ance cov­er­ages, and safe­ty his­to­ry.

• Lever­age Tech­nol­o­gy: Use track­ers to track the item in real time.

• Train Staff: Edu­cate work­ers about poten­tial warn­ing signs and to report sus­pi­cious behav­ior.

Conclusion

Suc­cess­ful Fight­ing Against Freight Scams
Freight scams are often a dan­ger­ous sup­ply-chain threat. How­ev­er, by being vig­i­lant and using the help of trust­wor­thy bro­kers, ship­pers now and again man­age to pro­tect both their car­go and funds. With the help of these best prac­tices, we can act as an indus­try to fight the scourges of fraud by cre­at­ing more wide­spread aware­ness of the types of scams that are out there.

To learn more about freight fraud and how to safe­guard your busi­ness, drop by Dig­gi­ty Mar­ket­ing.