Protect yourself from load broker fraud

Markel Insurance, ac.lekram|ofni#ac.lekram|ofni, has provided us with the following article.

How to protect yourself against fraud and do business safely online

Use qualified carriers through pre-qualification

“Pre-qualify” carriers and build strong relationships with ones you can trust. A qualification checklist to pre-qualify carriers and other service providers could be very helpful to your operations.

To do this, send the carrier a notice that requires the following information in advance, and ensure they give you 30-days notice of any changes:

  • Operating authorities like CVOR and NSC, or documentation from the US DOT or other agencies
  • Proof of Insurance (Cargo & Liability) - Ensure that the insurance amount fits the value of the goods shipped; contact the insurance company to make sure the certificate of insurance is valid and in-force; or even request to be an additional insured, if applicable
  • Customs accreditation information such as FAST, C-TPAT, and whether they are Bonded
  • The terms and conditions of the service being offered—could include a written contract, such as a load brokering agreement
  • Whether they own and operate their own equipment, or if they have any partnerships to route freight—i.e., will they be hauling this load themselves, or are you comfortable with them double-brokering the load?
  • Specialized equipment such as refrigerated units, lift gates, etc.
  • Special permits like a DOT Hazardous Cargo Certificate
  • Referrals or recommendations from other shippers/forwarders, carriers, etc.


Monitor and validate documentation

  • The best way to validate a document is by contacting its originator
  • Watch for forged documents; i.e. changed information like freight count, names and addresses
  • Be diligent about protecting your own bills of lading and documentation from being forged—blank bills of lading are an easy way to steal a carrier’s identity
  • Protect information about loads and values going out to others; speak to your drivers about maintaining confidentiality
  • Protect faxed, scanned, and any electronic invoices and files, as they can be leaked, copied or sold to criminals—destroy unused documents when possible and only provide information to those parties who need to see it


Do your homework

  • Become a part of the network—join industry associations, subscribe to cargo crime notification services, watch internet blogs and email notices
  • Always report fraud and theft; some carriers are hesitant to do so in order to protect their customer base (other carriers may use it against them) and to avoid bad publicity; the only way to stop it is to get the word out
  • Screen staff and contractors—a paper on cargo theft from the Australian Institute of Criminology reports that approximately 90% of cargo theft involves employees to some extent, whether or not it is to their knowledge
  • Use of a comprehensive inventory or pro bill numbering system with cargo and supply chain random auditing; double-check seal numbers and any assigned numbers on cargo; utilize IT systems for inventory control, digital signatures and encryption; limit electronic access to information
  • If possible, have security guards at your gates who require full documentation and photo ID of the driver before they let the truck out of the yard


Fraud works best on the victim who least expects it. The best way to protect yourself and your company is through knowledge.

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