The Freight Industry's Battle Against Fraud: A Decade of Rising Threats and Solutions

The trucking and freight industry is the backbone of North America's economy, moving goods worth trillions of dollars annually. But with great value comes great risk. Over the past decade, fraudulent activities in freight have surged, costing businesses hundreds of millions of dollars. As fraudsters evolve their tactics, industry leaders and technology platforms like CargoCredible.com are stepping up to combat these threats.

The Rising Cost of Fraud in Freight

According to the Transportation Intermediaries Association (TIA), the average financial loss per company due to freight fraud stands at $402,344.47, with the per-load loss averaging $40,760.17. The total industry-wide losses are estimated between $500 million to $700 million annually.

Cargo theft, a persistent issue, has seen an alarming 600% increase between November 2022 and March 2023, according to TIA. The Federal Motor Carrier Safety Administration (FMCSA) and TIA have identified a rise in fraudulent activities such as double brokering, identity theft, and fictitious pickups, which have cost companies not just money, but also credibility and customer trust.

The Most Common Types of Fraud

Fraud in the trucking industry has evolved over the years. The most prevalent types include:

1. Double Brokering

• A fraudulent broker accepts a load and re-brokers it to another carrier without authorization, often failing to pay the actual carrier. This has become one of the most damaging fraud types, affecting 43% of companies surveyed by TIA.

2. Cargo Theft

• Criminals steal entire truckloads using fictitious pickups or by rerouting legitimate shipments. High-value items like electronics and household goods are often targeted. Cargo theft alone resulted in $220 million in reported losses last year.

3. Identity Theft & Spoofing

• Fraudsters impersonate legitimate carriers or brokers using fake documents to intercept shipments. 17% of companies report email spoofing incidents, while 11% cite identity theft as a major concern.

4. Phishing & Cyber Fraud

• Hackers infiltrate freight companies through email scams, stealing sensitive data or diverting payments. As companies digitize operations, cyber threats are increasing at an alarming rate.

5. Fraudulent Invoicing & Unlawful Brokerage

• Fraudulent brokers manipulate paperwork to charge higher fees or bill multiple parties for the same shipment, contributing to millions in annual losses.

6. Fictitious Pickups

• In this scam, unauthorized individuals pose as legitimate carriers to pick up shipments without proper authorization. By the time anyone realizes what happened, both the scammers and the cargo are long gone.

How Fraud Has Increased Over Time

Fraud in trucking has grown significantly over the past decade due to advancements in technology and increasingly sophisticated tactics by scammers:

• 2015-2017: Fraud was primarily limited to cargo theft and basic phishing scams targeting smaller businesses with less robust security systems.
• 2018-2020: Scams like double brokering surged in popularity as fraudsters exploited vulnerabilities in load boards and online freight marketplaces.
• 2021-2023: The rise of AI-enabled phishing attacks made scams more convincing than ever before. CargoNet reported a 33% increase in cargo theft incidents between 2022 and 2023 alone.
• 2024-2025: Fraud complaints hit record highs, with reports of freight fraud increasing by 59% year-over-year as scammers targeted larger companies using fake credentials and cloned websites.

The financial impact has been staggering—according to data from industry associations like CargoNet and TIA (Transportation Intermediaries Association), freight fraud now costs businesses hundreds of millions annually.

The Impact of Freight Fraud

The ripple effects of fraud extend beyond the companies directly involved. Higher operational costs, increased insurance premiums, and supply chain disruptions ultimately lead to increased prices for consumers. Additionally, trust within the industry is eroding, making it harder for legitimate brokers and carriers to conduct business without excessive verification processes.

A TIA report found that one in five logistics professionals spends an entire day per quarter on fraud prevention, while 16% dedicate more than four hours daily to tackling fraud. This reduces productivity and diverts attention from core business operations.

High-Risk Areas and Trends

Certain states have emerged as hotbeds for fraudulent activities. California, Texas, Illinois, Georgia, and Florida are among the most frequent origins of freight fraud due to their high volume of logistics activity. Commonly targeted commodities include electronics, solar panels, and household goods, given their high resale value.

How CargoCredible.com is Fighting Back

CargoCredible.com is addressing freight fraud with a community-driven review system that allows brokers, carriers, and shippers to share real-time feedback. The platform is also developing a fraud detection and prevention system to identify red flags before transactions occur.

Key Features of CargoCredible’s Fraud Prevention Model:

• Review & Rating System: Identifies unethical brokers and carriers, preventing repeated fraud.
• AI-Powered Fraud Detection: Uses data analytics to flag suspicious transactions and behaviors. ( Coming Soon ) 
• Verification Tools: Ensures that carriers and brokers are legitimate before contracts are signed.
• Industry Collaboration: Works alongside regulatory bodies to enhance fraud prevention efforts.

Steps to Protect Your Business

Preventing fraud requires a multi-layered approach that combines technology, due diligence, and industry collaboration. Here’s what freight businesses should do:

1. Thorough Carrier Vetting – Always verify FMCSA registration, insurance coverage, and carrier history.
2. Technology Integration – Utilize GPS tracking, electronic logging devices (ELDs), and AI-driven fraud detection systems.
3. Stronger Cybersecurity – Implement two-factor authentication, email verification protocols, and regular cybersecurity training.
4. Industry Partnerships – Collaborate with trusted platforms like CargoCredible.com for fraud reporting and prevention.
5. Regulatory Enforcement – Push for stricter FMCSA regulations to close loopholes exploited by fraudsters.

Conclusion: A United Front Against Fraud

The trucking industry is facing a crisis, but solutions are emerging. Fraudulent schemes are costing businesses millions and damaging trust across the supply chain. However, with tools like CargoCredible.com, industry players can fight back through transparency, technology, and collaboration.

As fraud tactics evolve, so must our defenses. By working together, embracing technology, and remaining vigilant, we can restore integrity and security in the freight industry.

What’s Your Experience? Have you encountered fraud in your freight operations? Share your insights in the comments below and help others navigate this growing challenge!