In April 2024, we asked members of our Indago supply chain research community — who are all supply chain and logistics executives from manufacturing, retail, and distribution companies — if they had experienced cargo theft or other types of freight fraud in the past year. Almost half said they had experienced theft or fraud, and almost a quarter of them characterized their processes or efforts to prevent freight fraud as either “Poor” or “Very Poor.” Not surprisingly, at the Descartes Innovation Forum in October 2024, the session on freight fraud was standing room only. Simply put, this is a problem that all stakeholders in the industry must focus on. So, how big of a problem is freight fraud? Is it getting worse today? What can shippers expect in 2025? And how can technology help? These are the questions I asked Dan Cicerchi, VP and General Manager, Transportation Management at Descartes on a recent episode of Talking Logistics.
How Big is the Problem?
“Freight fraud is as bad as I’ve seen it in my career,” Dan says. He referenced a 2024 survey by TIA that found cargo theft was up a whopping 600% between November 2022 and March 2023. Dan explains that the industry is getting bigger, so there are more opportunities for fraud, and criminals are getting more sophisticated, with better technology.
What types of fraud/fraud trends is the industry dealing with? Dan notes they see email phishing, fake brands, fake insurance companies, carrier spoofing and other ways fraudsters are pretending to be someone they’re not. “It’s really a multi-factor problem, and new vectors continue to pop up that we have to look at and combat,” says Dan.
Plus, shippers are often working through freight forwarders or third-party logistics providers so they may not even be aware of who is moving their freight.
“Shippers can no longer take a hands-off approach,” says Dan. “They want real-time visibility to all their shipments, including those managed by third parties. And they need to vet their carriers against their risk profile so they know who they’re dealing with.”
How Can Technology Help?
Dan states that some of the ways technology can help is by employing two-factor authentication, as well as geolocation tracking on the Vehicle Identification Number (VIN ) and packet verification. It’s also about thinking about visibility more broadly, as he explains in this short clip.
Dan suggests shippers need to get good pre-tender information on carriers so they know their experience in the desired lanes, their performance history, and their compliance record. Starting with trusted carriers is a critical step in avoiding fraud. And analytics can be used to evaluate the quality and veracity of the data coming in to weed out spoofing and data fraud. All these factors come together in multi-dimensional analysis to identify potential problems and risks.
Dan also recommends shippers have conversations with their carriers and logistics providers to make sure they’re dealing with people and companies they can trust. “It’s the combination of people, process, and technology that provides safeguards.”
Trends for 2025
I next asked Dan what he sees in the year ahead with regards to freight fraud. He mentions that as the freight market improves and capacity starts to tighten, shippers will be tempted to accept riskier bids to cover their loads. Thus, there will be more opportunities for fraud. That’s why incorporating risk management capabilities into the procurement process is becoming even more critical.
What should shippers do to prepare to combat freight fraud in 2025? Dan shares a number of recommendations, so I encourage you to watch the full episode for all of his insights and advice. Then keep the conversation going by sharing your own questions and perspectives on this topic.
