TIA Releases State of Fraud in the Industry 2024 Report

Report shows an industry under siege with little help from authorities

The Transportation Intermediaries Association (TIA) - the only organization exclusively representing transportation intermediaries of all disciplines doing business in domestic and international commerce – released its State of Fraud in the Industry Report today revealing the extent of the threat, the financial impact on businesses and the critical steps the industry must take to protect itself from fraud schemes.

This report provides a detailed examination of the current state of fraud in the industry, offering insights into the most common types of fraud, the regions and commodities most affected, and the strategies companies are employing to mitigate these risks.

"We are an industry under siege right now and we are not getting the support from government and law enforcement authorities to help us combat this scourge on the supply chain," said Anne Reinke, president & CEO of TIA. "When people think of fraud in the supply chain, they only see what is happening to a business, they are not seeing the trickle-down effect to consumers and economy. Fraud is a multimillion-dollar problem that needs to be addressed today."

Based on a survey of 200 TIA members representing the diversity of the industry, the report highlights the most prevalent fraud types, the financial impact on businesses and the widespread nature of these incidents.

Key Findings:

Primary Target of Fraud: Truckload freight is overwhelmingly the primary target of fraud, with 98% of respondents identifying it as the most vulnerable mode. This is a crucial insight, as it highlights where companies should focus their preventive efforts.

Multiple Fraud Types: Eight types of fraud were highlighted in the survey: spoofing, unlawful brokerage scams, fictitious pickups, phishing, identity theft, email/virus, inbound phone calls and text messages. This diversity in fraud experiences underscores the complexity of the challenges faced by the industry.

Impact on Businesses: The average gross cost of fraud reported by respondents was $402,344.47, with an approximate per-load cost of $40,760.17. The rise in fraud is not just a financial burden—it also increases the cost of goods, affecting the entire supply chain and ultimately impacting consumers.

Fraud Prevention Efforts: Nearly 1 in 5 respondents indicated that they spend an entire day each quarter on fraud prevention, while 16% reported spending more than 4 hours a day, and 34% said they dedicate more than 2 hours a day to these efforts. Even those who spend less than 2 hours a day on fraud prevention make up a significant portion, with 30% of respondents indicating this level of commitment. This considerable time investment in monitoring, verifying, and responding to fraudulent activities diverts attention from other essential business operations, affecting overall productivity and increasing operational costs.

High-Risk Areas: Specific states, particularly California, Texas, Illinois, Georgia and Florida, are identified as having the highest incidents of theft. These areas are key logistics and transport hubs, making them prime targets for criminals.

Targeted Commodities: The most commonly stolen goods are electronics, solar panels and household goods, which are targeted due to their high value and ease of resale.

Link to report infographic.

Report Methodology:

The data presented in this report was collected through an online survey conducted by TIA from Feb. 6 through Aug. 26, 2024. The survey targeted TIA members, with nearly 200 respondents participating. Respondents were asked to share their experiences with various types of fraud, the financial impact of these incidents, and the measures they have implemented to prevent fraud. The data was then analyzed to identify key trends, common fraud types, and the overall impact on the industry. Additionally, this report references TIA’s 2024 Fraud Framework to provide a well-rounded perspective on the challenges faced by third-party logistics companies.