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  June 21st, 2024 | Written by

Safeguarding Supply Chains: Navigating the Surge in Fraud and Cargo Theft

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This year, we continue to see an uptick in fraud and theft in the Supply Chain industry. This has been top of mind for every industry leader throughout the country and it’s crucial for companies to pay more attention to this from an operational standpoint. Shippers and carriers need to stay knowledgeable in order to stay ahead of any malicious disruptions to their freight. 

Read also: 2024 Brings More Nearshoring and Freight Fraud

We’ve all recently heard about numerous fraud and cargo theft stories throughout the country. There has been an uptick in fraudulent freight activity and it will continue into next year. We saw roughly a 50-55% minimum increase of fraud from Q2 2022 to Q2 2023. And, in some lanes, activity was up well into a 200% fraud increase. What we’re seeing now seems to be a very sophisticated approach to fraudulent activity that seems to also not be U.S.-based.

Not only does recent fraudulent activity in the industry include spoofing and tracking software, but also setting up fake domains for small and large carriers as well as fake domains for a third-party logistics company (3PL). Simply put, industry crimes are getting more and more complicated. Bad actors create fake domains for email purposes that look almost identical to an actual 3PL’s domain. Companies who do not take a second look will miss the small but important details and potentially fall victim to such crimes.

Bigger companies are getting better at spotting fraudulent activity but it’s the smaller “mom and pop” operators that need to be more vigilant. The small one-to-ten truck carriers may not have sophisticated cybersecurity practices in place to catch this kind of activity. That’s why they have to do their due diligence from where they’re getting a load every single time. They need to always confirm it’s a 3PL that they’ve worked with or it’s a reputable 3PL with freight that’s actually being managed by that same company. The small 3PLs that may only cater to warehousing, receiving, and cross-docking, are the ones that need to stay current and educated on recent market developments. They need to ensure that there are standard operating procedures already in place for every load.

Small carriers and 3PLs need safeguards in place to prevent an erroneous load from shippers. In turn, shippers need to play a crucial role in preventing fraudulent activities by conducting thorough due diligence on personnel and carriers at pickup and delivery locations. They need to be involved and conduct due diligence on the personnel at a dock, warehouse or distribution center. Due diligence could be as simple as physically walking to the appropriate area to confirm the carrier picking up the load is the same as it appears on the bill of lading. It’s very easy to sign a rate confirmation and send it without paying attention but those extra few moments are the differentiators between being safe and falling victim to load scammers.

Companies need to realize that it’s more beneficial and cost-effective to be proactive instead of reactive. Adopting a proactive approach to freight security is essential for mitigating risks and minimizing potential losses. This involves implementing stringent security protocols for every load and continuous training programs to educate employees about emerging fraud tactics. By investing in preventive measures, companies can effectively deter fraudulent activities and protect their assets. The recent increase of malicious activity highlights the importance of businesses being more vigilant and in-tune with market developments so that they can overcome incoming industry challenges head-on. 

As the year progresses, businesses must be proactive when it comes to addressing the growing challenges posed by fraud and cargo theft. By staying one step ahead, investing in robust security measures, and fostering a culture of accountability and awareness, industry players can effectively safeguard their operations and maintain the integrity of the supply chain.

Author Bio

Karl Fillhouer is the Vice President of Sales and Operations of Circle Logistics, a privately held third-party logistics company committed to delivering on three core promises to their customers: No Fail Service, Personalized Communication, and Innovative Solutions. Circle Logistics leverages its technology, industry experience, and employee ingenuity to develop industry-leading transportation solutions. For more information, visit