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The Transportation Intermediaries Association has released its “State of Fraud in the Industry 2024 Report.” Fraud is a massive problem for the freight industry. Its many forms range from physical theft of product to identity theft, as well as financial theft, which is most commonly theft that involves invoicing issues.
The survey found that the primary target of fraud is truckload freight. It’s the most vulnerable mode of transportation. When it comes to the type of fraud that people see, 72% of respondents experienced at least three varieties, meaning companies were dealing with a multifaceted threat that requires more than a simple fix.
The financial impact of freight fraud in the industry is alarming. The study found, “The average gross cost of fraud among respondents was $402,344.47, with some companies reporting losses well over $1 million, with the per-load cost of fraud averaging $40,760.17. These figures highlight the severe financial strain that fraud places on businesses, particularly smaller companies that may struggle to absorb these losses.”
One of the more interesting things the study found was in the geographic distribution of fraud. Certain regions are more prone to fraud than others. California, Texas and Illinois were the top three states for these incidents, with nearly half (48%) of instances occurring in California alone.
The four commodities most susceptible to fraud are electronics/appliances (13%), solar panels (12%), household goods (9%) and frozen/refrigerated foods (8%). The big draw for these items is that they’re valuable but also easily sellable, making them the perfect target. Extra training and precautions are needed for these commodities.
Unfortunately there isn’t an easy way to stop freight fraud. The prevailing strategies are communication and networking to share instances of what happened and spotlight the bad actors who could pull off a scheme against someone else. That combined with rock-solid training and proper security measures in place for an organization is the first step to take to reduce the level of exposure.
TRAC Tuesday. This lane from top freight market Atlanta down to Tampa, Florida, is one of the trickier loads this week. Hurricane Milton, currently a Category 5, is expected to make landfall to the western coast of Florida on Wednesday. The hurricane is expected to weaken over the next day but nonetheless to make landfall as a life-threatening storm. Most of the west coast of Florida is expected to be affected, as are parts of central and eastern Florida as the storm tracks across the state.
Spot rates and outbound tender rejections will continue to sharply increase as carriers look to move assets and drivers out of the storm’s path. Essentially anything that doesn’t have to be in the area that isn’t already in the area isn’t going to make it. Recovery for the Tampa market and surrounding areas will be slow as the damage is evaluated following landfall.
Who’s with whom? The battle within Forward Air rages on. Investors have called for a formal sales process following the company’s contested merger with Omni Logistics. A majority of the investors of Forward Air aren’t happy with recent decisions and think the best path forward for the company is new ownership and management.
“Do not confuse our stake as a vote of confidence in the Company’s Board and leadership. On the contrary, we view your disastrous track record of ignoring shareholders’ views as abhorrent,” FreightWaves’ Todd Maiden reported, quoting from a Monday letter to Forward’s board. “However, you have an opportunity now to do the right thing by listening to resounding investor feedback and executing a formal sales process that maximizes value for all shareholders.”
The letter from investors does not pull punches, and it’s safe to say that shareholders are angry about this and would like some solutions that restore the company’s value.
The more you know
How the logistics industry is providing relief after Hurricane Helene
Hurricane Milton already impacting Florida freight markets
Hurricane Milton may be too much for the freight market to handle
What is ‘the Waffle House Index’?
The post Check Call: Freight fraud has many faces, none of them pretty appeared first on FreightWaves.
