Every small business is aware that fraud is a major threat to operations. It’s why 59% of businesses complete a fraud risk assessment annually according to PWC’s 2024 Global Economic Crime Survey.

The transportation industry is no different than any other—prone to business fraud and struggling to stomp out threats before they result in financial losses. However, the fraud landscape is always changing; not all types of fraud are on business owners’ radar. Let’s define the most likely threats to a transportation and logistics company and ways to curb them.

Common Types of Fraud and Freight Fraud Schemes

The main categories of frauds and scams to watch for as a trucking company owner include cargo theft, electronic check fraud, internal fraud, and cybersecurity threats.

Cargo Theft

One of the largest threats to a transportation and logistics business is cargo theft. Many bad actors study electronic load boards watching for shipments of high value items, such as precious metals, posted by dispatchers. These bad actors pose as legitimate carrier employees and call a plant for a pickup number. Having proper controls in place helps your business stay ahead of these scammers.

Another common cargo theft tactic involves security procedure deviation. You might witness employees dropping shipments in a yard that is not secured, leaving valuable merchandise open for fraudsters to grab and set off with in just seconds to minutes. Be sure that security policies are in place and that your team knows to never drop shipments in any yards that are missing proper security protocols.

Electronic Check Fraud (AKA Payment Fraud)

Businesses in the freight industry use electronic checks to keep operations running smoothly without disruptions. You can’t exactly leave your employees broken down on the side of the road with a shipment. So, you send an electronic check to pay for truck repairs and get your shipment back enroute.

Scammers know the urgency with which these repairs need to be done, so they use this vulnerability against you.

Here’s how it typically happens:

• A scammer calls posing as a repair shop
• Claims to be working on one of your trucks
• Requests payment via electronic check
• You send payment because it feels routine
• Later, you discover there was no repair—or even a company by that name

Internal Fraud Threats

The Association of Certified Fraud Examiners (ACFE) estimates that organizations lose approximately 5% of their annual revenue to occupational (or internal) fraud.

Common internal fraud risks include:

• Misuse of a company credit card
• Unauthorized payments via checks or wires
• Employees setting up fictitious vendors
• Payments routed to personal bank accounts disguised as vendors

While you might place a lot of trust in your employees, trust is a terrible internal control. It’s also important to remember that good people can make bad choices when faced with external pressure.

Cybersecurity Threats

The last major threat I’d like to cover is phishing. We all know how phishing emails work—a scammer poses as a legitimate company and sends you a link or attaches a seemingly innocent PDF.

Red flags to watch for:

• Emails requesting urgent payment
• Attachments or links from unknown senders
• Messages asking for sensitive information
• Slight variations in familiar email addresses

These malicious emails can infect systems or lead to theft of sensitive data and cash.

Freight Fraud Prevention Strategies

Validate, Validate, Validate

For threats like cargo theft, it’s important to have security protocols in place. Ensure that your team has documented procedures to validate the identity of carrier employees calling in for a pickup number.

Strong validation practices include:

• Verifying caller identity before releasing pickup numbers
• Using GPS tracking on trucks and cargo
• Monitoring routes and flagging deviations
• Installing yard surveillance systems
• Using access controls (codes, keycards)
• Coordinating quickly with law enforcement when threats arise

For accounting-related fraud:

• Limit who can authorize payments
• Restrict ACH updates to trained individuals
• Verify all banking changes independently

Checks and Balances

In addition to the steps mentioned above, it can be beneficial for business owners to hire accounting or audit professionals to conduct a fraud risk assessment and assist with internal controls.

At a minimum, no single person should:

• Authorize transactions
• Control assets
• Maintain financial records

I also suggest limiting CFO access to cash where possible. If access is necessary, require secondary approval to validate legitimacy.

I always say that I don’t trust anyone, including myself. Having an attitude of suspicion can help set up proper controls to prevent fraud—or even small financial mistakes.

Reconcile Bank Accounts Daily

Reconciling bank accounts regularly won’t always prevent fraud—but it will help you catch it quickly.

Key best practices:

• Separate reconciliation from payment responsibilities
• Review transactions daily or frequently
• Act immediately when fraud is detected

Once you notice fraudulent activity, notify your bank immediately to stop further transactions.

Positive pay can also be a strong deterrent. Businesses provide the bank with approved check details, and any mismatch results in rejection—preventing fraud before it hits your account.

Zero Trust Policies for Cybersecurity Threats

Zero trust policies require all users to be authenticated and verified. Any unverified communication should be treated with suspicion.

Simple rule:
If you can’t verify it, don’t trust it.

When in doubt:

• Call the vendor directly
• Confirm the request
• Never rely solely on email communication

Review Processes Periodically

It’s important not only to set fraud prevention procedures but also to review them regularly.

Think of it like an annual check-up:

• What’s working?
• What isn’t?
• What needs improvement?

Technology evolves constantly, and so do fraud tactics. Staying proactive is key.

While the trucking industry is no stranger to fraud threats, I hope this blog post provides you with strategies to implement in your trucking company to combat them.

If you’re feeling overwhelmed or concerned about potential fraud, reach out to our fraud and forensics team for support.