The transportation sector is grappling with an increasingly severe fraud issue, manifesting in diverse and complex forms. Amid a freight recession that has driven shipping rates lower, some brokers and carriers have resorted to desperate measures like double brokering—secretly re-brokering contracted shipments to make up for lacking capacity to cover the loads, or to make some additional margin on the difference between the original rate and secondary rate  without the knowledge of the original parties involved. Additionally, the impact of cyber-related fraud, including hacking, is profound, albeit difficult to quantify. In these cases, criminal enterprises posing as legitimate brokers or carriers have no intent to pay for the double brokered load, in some cases they simply want to collect the payment from the shipper and leave the carrier who hauled the freight without any payment for their services, or they may steal the freight and hold it for ransom, or sell the cargo on the black-market. These attacks have led to temporary shutdowns of several companies, and in some cases they led to bankruptcies, signaling a critical vulnerability.

Despite increased efforts to educate and raise awareness among shipping companies about the spectrum of fraud risks—from the more recognized threats like double brokering and trailer theft to the subtler, emerging schemes—the challenges remain formidable. The financial and operational burdens stemming from fraud, such as stolen loads and unauthorized mode switching, are significant and often crippling.

In response to the evolving sophistication of fraudulent schemes and the voluminous data handled in logistics, it is imperative for organizations to implement advanced monitoring and analytical tools. These technologies are crucial for detecting and preventing fraudulent activities, thus mitigating financial losses and operational interruptions.

Descartes’ MacroPoint FraudGuard, is a solution designed to enhance shippers’ ability to detect and manage carrier fraud effectively. MacroPoint FraudGuard, a feature of the multimodal visibility platform Descartes MacroPoint, analyzes billions of data points concerning freight location and shipment status to identify potential fraud. This proactive detection allows for timely interactions with carriers, increasing the likelihood of resolving issues favorably. The platform provides better visibility and control over freight operations and shipments, improving data quality for enhanced communication and decision-making. This is increasingly important in a freight market pressured by high consumer expectations for tracking and delivery times, where maintaining delivery performance is critical.

Available to all Descartes’ MacroPoint users at no additional cost, FraudGuard offers a comprehensive suite of capabilities to effectively combat fraud and includes blocking fake or spoofed location pings while crediting the customer's account for the affected shipment, creating new shipment statuses for instances of "possible fraud detected," verifying the current location of freight, and confirming driver presence through image verification based on delivery photo metadata. Additionally, it features email alerts for orders flagged as potentially fraudulent. These capabilities lead to several benefits, including early detection of fraud which helps in preventing operational disruptions and financial risks, cost savings by proactively preventing fraudulent activities, and improved carrier scorecards through accurate information verification. The solution also enhances trust among customers and carriers by identifying and promoting reliable partners as it streamlines collaboration and dispute resolution, ensuring that interactions are based on verified facts.

As fraudulent tactics evolve, so must the industry's security and risk management strategies, ensuring robust defense mechanisms are in place to counteract and minimize the impact of these criminal endeavors effectively. Organizations need to proactively use advanced technologies and strategies to protect their businesses and ensure the integrity of the supply chain. Key among these technologies is leveraging verified location data, which helps validate shipment authenticity, prevent double brokering, ensure carrier compliance, and enhance overall security and resilience of the freight ecosystem. By adopting these technological advancements, freight brokers can confidently tackle the complexities of carrier fraud and secure the future of their operations.