TIA report shows freight industry fraud crisis growing

The Transport Intermediaries Association (TIA) has released its 2024 State of the Industry Fraud Report, revealing the growing threat of fraud in the transport and logistics industry. The report provides a comprehensive analysis of financial losses and highlights the urgent need for stronger protection measures as fraud continues to surge throughout the supply chain.

See also: Maintaining a secure supply chain: Responding to a surge in fraud and cargo theft

“Our industry is suffering, and authorities are not giving us enough support to deal with this crisis,” said Anne Reinke, president and CEO of TIA. “Fraud in the supply chain not only affects businesses, but also consumers and the economy as a whole. This is a multi-million dollar problem that requires immediate action.”

The report, based on responses from 200 TIA members, details the most common types of fraud, regional hotspots and the products most often targeted. It also highlights the heavy financial burden that fraud places on businesses and consumers.

Key findings

Taking truckload freight as the main goal: 98% of respondents said truckload shipments are most vulnerable to fraud, suggesting that companies should focus their defense strategies.

Various fraud methods: Scammers use a variety of tactics, including spoofing, illegal brokerage scams, phishing and fake withdrawals. The report identifies eight main types of fraud plaguing the industry, illustrating the multifaceted nature of the threat.

Financial impact: Businesses reported an average total fraud cost of $402,344.47, or about $40,760.17 per shipment. This not only increases operational costs, but also drives up the cost of goods for consumers.

Fraud prevention measures: Nearly 20% of respondents spend a full day per quarter fighting fraud, while 16% spend more than four hours per day on prevention. This significant time investment diverts resources from core business activities and affects productivity.

High-risk areas: States such as California, Texas, Illinois, Georgia and Florida were identified as high-risk areas, where the frequency of fraud incidents is significantly higher due to the concentration of logistics hubs.

Target products: High-value items such as electronics, solar panels and household items are most vulnerable to theft due to their ease of resale.

TIA’s report paints a grim picture of the industry struggling to cope with increasing levels of fraud and calls for greater intervention by governments and law enforcement agencies. Without such support, businesses will continue to face significant operational and financial hurdles in an already challenging market.