Latest TIA Fraud Report Results: Things are Especially Bad for the Trucking Industry

Fraud in the Transportation Industry: What the 2024 Fraud Report Reveals

The Transportation Intermediaries Association (TIA) has released its “State of Fraud in the Industry 2024 Report.” This report highlights the rising threat of fraud in the transportation industry. As the main group representing transportation intermediaries in both domestic and international markets, TIA’s findings offer important insights into how widespread and damaging fraud has become.

Growing Threat to the Industry

Anne Reinke, the President and CEO of TIA, describes the situation as dire. “We are an industry under siege right now, and we are not getting the support from government and law enforcement authorities to help us combat this scourge on the supply chain,” Reinke said. Fraud in the supply chain is not only a problem for businesses—it affects consumers and the economy as a whole. Fraud is a multimillion-dollar issue that demands attention now.

The Fraud Report Says Truckload Freight is the Top Target

According to the TIA survey, which included responses from nearly 200 members, truckload freight is the primary target for fraud. In fact, 98% of respondents identified it as the most vulnerable. This means truckload freight, which moves large amounts of goods, is a frequent target for criminals. Companies should focus their fraud prevention efforts here to better protect their operations.

Common Types of Fraud

The report identifies eight common types of fraud in the industry. These include:

• Spoofing: Fraudsters pretend to be legitimate businesses.
• Unlawful Brokerage Scams: Criminals pose as brokers and steal freight.
• Fictitious Pickups: Scammers pose as carriers to take shipments.
• Phishing: Targeted emails designed to steal company information.
• Identity Theft: Criminals use fake identities to deceive businesses.
• Email/Computer Viruses: These are used to disrupt or steal data.
• Phone Call Scams: Fraudsters call pretending to be trusted sources.
• Text Message Scams: Unsolicited texts aim to deceive logistics companies.

These schemes show how complex the problem of fraud has become, making it harder for companies to detect and prevent it.

Financial Impact on Businesses

The financial toll of fraud is huge. The average loss reported by TIA members was over $402,000. On a per-load basis, companies are losing about $40,760 to fraud. These rising costs hit businesses hard and are passed on through the supply chain. In the end, this means higher prices for consumers.

Time Spent on Fraud Prevention

Because fraud is such a major issue, companies are investing significant time and resources into prevention. The report found that almost 1 in 5 companies spend an entire day each quarter working to prevent fraud. About 16% of respondents said they spend more than four hours a day on this, while 34% spend over two hours each day. Even businesses that spend less than two hours daily on fraud prevention represent a large portion of the industry, making up 30% of respondents. This time commitment takes away from other important business tasks and adds to operational costs.

The Fraud Reports Says These are High-Risk Areas

Certain states stand out as high-risk areas for fraud. California, Texas, Illinois, Georgia, and Florida have some of the highest rates of theft. These states are major logistics hubs, making them prime targets for fraudsters. Companies operating in these areas need to be especially cautious and implement stronger fraud-prevention measures.

Targeted Commodities

Fraudsters are after specific high-value items. The most commonly stolen goods include electronics, solar panels, and household products. These items are easy to resell, making them attractive targets for criminals. Businesses transporting these types of goods need to be particularly vigilant.

What the Industry Needs to Do

The 2024 report is a call for the transportation industry to take immediate action. As fraud schemes grow more sophisticated, businesses need to invest in better fraud detection systems and tighten their security measures. The industry also needs more support from government and law enforcement to combat these threats effectively. With the right strategies in place, companies can protect themselves, reduce the financial damage, and create a more secure supply chain for everyone.

Fraud may be increasing, but with the right tools and tactics, businesses can fight back and lessen its impact.