Freight Fraud: What Shippers Can Do To Prevent It

Freight fraud affects both transportation companies and shippers alike. Carriers lose money, businesses are left without product, and consumers can’t get the goods they want. At USA Truckload Shipping, we know how troublesome freight fraud can be for shippers. We’re going to give you more information about this crime and show you how you can protect your business from it. 

Key takeaways:

• Freight fraud can come in many forms like double brokering, cargo theft, impersonation, phantom shipments, and payment fraud. 
• This fraudulent behavior takes a huge financial toll on the logistics industry, with over $400,000 in losses occurring annually because of it. 
• Shippers can stop from becoming victims of freight fraud by strengthening their carrier relationships, monitoring freight pickups, and maintaining secure data systems.  
• Various trends drive freight fraud, such as the rise of organized crime networks and digital vulnerabilities.

Now that we’ve covered the basics, let’s get into the finer details of freight fraud and the challenges it poses for shippers. 

Common Types of Freight Fraud

Freight fraud is a criminal act that occurs when individuals or groups manipulate transportation transactions for their financial gain. Due to the broad nature of this crime, it can encompass a variety of different activities. 

This can include:

• Double Brokering: This occurs when a broker or carrier that has secured a load and transfers it to another broker or carrier without the knowledge of the shipper. This can lead to disputes over payment and delivery failures.
• Cargo Theft: The outright stealing of physical cargo. Theft can occur while freight is in transit, stored at a warehouse, or during a fictitious pickup. 
• Impersonation & Identity Theft: Fraudsters pretend to be legitimate carriers to gain access to shipments. Criminals will often use emails, forged documents, and even cloned contact information to trick shippers.

With so many avenues for criminals to perpetuate freight fraud, it can be difficult for shippers to defend themselves from it. 

Related: How To Report Double Brokering

Real World Examples of Freight Fraud

There have been numerous instances of freight fraud that have made the news in recent years. In October 2024, the London-based company Flycatcher was planning to ship 12,600 Smart Sketchers out of a warehouse in North Las Vegas to a Walmart distribution center in Atlanta. 

The three trucks hired to deliver the toys never made it to the final destination. Due to a complex double brokering scheme orchestrated by scammers, two of the trucks were diverted to Los Angeles. The fate of the third shipment has yet to be determined. 

Smart Sketchers retail for $108, which means the lost shipment was valued at over $1 million. 

The Financial Toll of Freight Fraud

The financial impact freight fraud has on businesses and the logistics industry are huge. Consider some data we’ve provided from the Transportation Intermediaries Association (TIA) about freight fraud in 2024. 

• $402,344.47 is the average gross cost of freight fraud per company each year.
• 43% of companies say unlawful brokerage scams are their primary concern.
• 98% of companies say that truckload freight is most vulnerable to freight fraud.

There were also 974 reports of freight fraud to TIA Watchdog in 2024. Of those reports, there were three categories of freight fraud that occurred more often than others. 

Various commodities can be stolen in cases of freight fraud. However, the TIA found that electronics, solar panels, and household items were the most common. This is likely due to the high value of these products. 

How Shippers Can Avoid the Problem

While much of freight fraud coverage highlights the effects it has on carriers, it also hurts businesses and their customers. In the following sections, we’ll discuss the ways that you can protect your freight from this crime. 

Verify Your Carrier Rigorously 

As we’ve already discussed, criminals often fake their identities by posing as legitimate carriers. This allows them to trick businesses out of their shipments. That’s why it’s essential you verify your carriers as carefully as possible.  

Here are some verification methods you can use:

• Confirm Federal Motor Carrier Safety Administration (FMCSA) registration
• Verify address and contact information
• Cross-check insurance coverage
• Validate truck fleets of a carrier
• Look for reviews and ratings from previous clients

Verifying each of these points will ensure the carrier you select is both legitimate and reliable. 

Monitor Pickups and Documentation

Abiding by a strict pickup routine and maintaining accurate documentation can reduce the chances of freight fraudsters taking your cargo. You should clearly define the process you’ll use to authorize pickups. Make sure to also limit the amount of personnel with access to the pickup information. 

Verifying the driver’s identity is especially important. Check their CDL and company ID to determine if they’re the person that should be picking up your goods. All shipping documentation must be accurate and descriptive. 

For your own records, take photos during the following:

• Truck 
• Trailer
• Licence plates
• Department of Transportation (DOT) placard
• Driver’s CDL

Should the worst happen, these photos can help law enforcement track down your shipment.

Related: How To Schedule A Freight Pickup

Watch for Phishing Attacks

Another way to protect your business from freight is by watching out for phishing attacks. Fraudsters use a variety of phishing methods to trick shippers. This can include anything from phony emails, to hijacking load board credentials. 

Here are some ways you can avoid falling for these schemes:

• Train your workers to identify phishing
• Implement secure digital communication
• Use load boards with built-in security

Using these strategies will help you and your workers better identify scammers that want to steal your company’s shipments. 

Maintain Secure Data Systems

Having modern, high-security databases will prevent fraudsters from stealing your information and using it for illicit activities. Fortunately, there are a variety of technological solutions that can help you circumvent this problem. 

For one, you can use encrypted systems that will keep driver information, communication, and shipment details confidential. Another option is to implement software design to spot fraud before it occurs. This technology can verify a carrier’s credentials and detect suspicious behavior before you book a load. 

Finally, secure firewalls and intrusion detection will protect your data from digital attacks. 

Track Shipments Carefully

Tracking your shipments is essential when you’re shipping freight. This provides transparency for your customers and allows you to monitor the progress of your load. The immediate visibility that tracking provides will make it difficult for fraudsters to steal or divert your shipments. If something does go wrong, you’ll be able to quickly detect it. 

Here at USA Truckload Shipping, we provide tracking software integration between us and our customers. This allows them to see exactly what we see in real-time. With this technology, we’ll provide superb security for your freight. 

Can You Insure Against Freight Fraud?

Certain insurance policies can protect you from the effects of freight fraud. Many carriers will tell you they use cargo liability insurance. However, this form of insurance is meant to protect them from financial losses. 

This means you’ll need to obtain a policy from a third-party provider. Although there are a variety of policies you can select, freight insurance will only provide you with coverage when your goods are damaged or lost while in transit. 

It’s not an effective tool that will prevent freight fraud from occurring, though it can cover or mitigate your losses. 

Transport Your Freight Securely with USA Truckload Shipping

USA Truckload Shipping is a 3PL that provides trustworthy shipping services all across the US. We have a vast network of carriers that we use to transport our customer’s freight. They’re vetted rigorously to ensure they’re legitimate and reliable. 

They can provide standard truckload shipping, expedited freight services, and even white glove delivery. Our carriers are active in all 50 states, which means they can pick up and deliver your freight to almost any location in the country.

If you’re ready to outsource your shipping services, fill out your request for proposal today! You can also call our team at (866) 353-7178 or reach out to us on our contact page.