Criminal fraud in its many and various manifestations within the global supply chain is seen by international freight transport insurer TT Club as a primary and growing threat.
Carrier fraud, in particular, is a "dominant occurrence", and the insurer called for renewed vigilance from shipping operators.
TT Club said the almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within the complexities of the global supply chain.
These have many manifestations, from payment fraud that involves existing mandates and impersonation of executives to procurement fraud featuring false invoicing.
"Carrier fraud, in which criminals imitate hauliers and other sub-contractors, including drivers with falsified documents, accounted for 84% of TT claims involving fraud or deception in 2022," the insurer said, noting that TT is eager to pinpoint these risks and offer advice to industry on how to not just identify potential fraud but to minimise and avoid losses through them.
"No one – from freight forwarders, shippers, and carriers to container owners and logistics, ports, warehouse and depot operators – should underestimate how lucrative an industry fraud is. Using sophisticated, low-risk tactics, fraudsters can easily steal large amounts of money or consignments of cargo,” said Mike Yarwood, managing director, Loss Prevention at TT.
Rise in carrier fraud
"Incidents of fraud that target international supply chains across the globe are not perpetrated by opportunistic criminals working in isolation but, in the majority of cases, the work of sophisticated organised crime gangs. They have well-honed methodologies that are adaptable in the face of detection devices and changes in operating procedures, as the experience of recent disruption to the freight transport system has proved."
"Our awareness and readiness to protect our businesses must be stepped-up," Yarwood added.
TT noted that fraudulent activities are on the rise, as it saw 15% of its cargo theft claims arise from fraud or deception.
"TT found; however, that carrier fraud dominated its claims of this type last year. There are instances of fake carriers intercepting haulage instructions from forwarders or shippers and posing as the authentic carrier, also falsifying cargo pick-up or delivery documentation to steal loads," the report said.
One common tactic is where fraudsters pose as forwarders using a freight exchange site and provide false instructions to a driver.
"To avoid incidents such as this and other frauds, it is crucial to make employees aware of the possibilities, to take extra care to verify documentation and instructions directly with customers and/or trusted partners, especially in pressure situations where carrier options might be in short supply or when there are particular time constraints," Yarwood said.
