The logistics industry has seen a troubling rise in fraudulent activities, with double brokering and cargo theft becoming increasingly prevalent. As a carrier and broker, First Priority Transport LLC aims to raise awareness and share crucial tips that our compliance team uses to ensure the security of the freight we handle. By following these guidelines, you can safeguard your company’s reputation and provide peace of mind to your customers.
Ways to Help Protect Your Company from Fraud
1. Verify the Identity of Transporters
Ensure that brokers communicate with the Points of Contact (POCs) at both shippers and receivers. Confirm the name of the company, truck number, and trailer number being used to transport the freight. If this information does not match the paperwork, and if the equipment does not display the company’s name on the side of the truck, DO NOT LOAD THEM.
2. Validate Carrier Insurance
Always verify the insurance of the carrier booking the load. Fake Certificates of Insurance (COIs) are rampant, so call the insurance company to confirm the policy number and the vehicles/trailers covered under the policy. Do not accept COIs without this information.
3. Scrutinize the COI
An initial review of the COI can help identify potential fraud. Ensure the font is consistent throughout the document, and check that the alignment of the information in the Producer and Insured Boxes section is correct. The date on the top right corner must be after the policy effective dates.
4. Request Direct Communication from Insurance Agents
Always request to be listed as the certificate holder on the insured’s policy, and ensure the COI email comes directly from the insurance agent. This direct communication is crucial for legitimacy.
5. Establish Strong Relationships with Insurance Agents/Brokers
Building good contacts at each firm you do business with can help verify any future certificates. These relationships can quickly confirm the legitimacy of COIs, saving your business time and money while protecting your reputation.
6. Screen Carriers Thoroughly
Implement thorough screening procedures for new carriers, especially if you pay via ACH, as double brokers often request ACH payments. Verify the contact details from the company posting the load and be cautious of brokers who only use email. Always call to verify and speak to them directly.
7. Assess Load Rates
Ensure the offered rate for the lane and commodity is accurate. If a rate seems too good to be true, it likely is.
8. Check Carrier History and Location
Most freight brokerage companies prefer carriers with at least six months of active MC authority and tend to exclude carriers from areas known for fraud, such as Los Angeles, Miami, and Chicago. It is also important to be mindful of any newly established companies. Always verify the carrier’s address; if it leads to an open field or an unlikely location, it is probably fraudulent.
Conclusion
Implementing these standard operating procedures from a compliance perspective is essential. It may take time, but these measures will protect your company’s reputation and ensure the safe and efficient transportation of your customers’ freight. At First Priority Transport LLC, we are committed to maintaining the highest standards of security and reliability in the logistics industry.
