Carriers play an essential role in the global supply chain. They ensure that goods are seamlessly transported from one point to another. Several industries expect a carrier to efficiently deliver commodities to their destinations.
Unfortunately, the carrier industry is riddled with fraud. Some unscrupulous individuals always exploit the vulnerabilities within the system to conduct unauthorized route deviations, cargo thefts, insurance scams, and fabricate documents. These actions can be diverse, cunning, and difficult to discern. The good news is that you can fortify your business and customers against carrier fraud. Here are three ways to protect yourself from carrier fraud:
- Scrutinize Carrier Credentials
When choosing a carrier to transport your goods, examine their credentials. Think about this process as checking a doctor’s qualifications before entrusting your health to them. Analyzing a company’s credentials can save you from fraud.
Begin by finding out if they have a legitimate business name and physical address. A simple online search will enable you to know if the carrier’s details match up. Also, find out if they have a permit to operate in your region. Licenses, such as MC, USDOT, and others can prove that the carrier company is mandated to operate legally.
A reputable carrier firm should also have legitimate insurance documentation. Their policies should also cover your cargo’s value in the event of an accident. Some fraudulent carriers may use forged insurance documents to convince you that they’re covered. You can unearth this lie by calling the insurance company listed on the document to confirm the policy’s legitimacy.
Furthermore, it’s important to seek the opinions of individuals who’ve used the services of your chosen carrier. Check the carrier’s website and find out reviews about them. Any reported accidents involving such a company could be a red flag that you should take seriously.
Several tools can help you dig deeper into a carrier’s background. You can go to the FMCA website to access the carrier’s inspection records, compliance history, and performance data. Trade organization websites and industry databases can also give you additional information. Diligently analyzing carrier credentials before letting them transport your goods can help you avoid falling victim to fraud.
- Use Advanced Tracking Technologies
Tracking technologies can keep you safe from carrier fraud. They’ll enable you to monitor your product’s locations in real-time from start to finish. Continuously monitoring goods will let you quickly detect any deviations and anticipate delays. This level of oversight can deter fraudsters and let you call for help if you notice any suspicious activity.
RFID and GPS technology are often used to track cargo in real-time. RFID will give you detailed data about your cargo, while GPS will tell you the exact shipment location. Through this duo, you’ll be able to know the whereabouts of your commodities and their conditions.
GPS trackers are also designed to inhibit theft. If there’s a route change, they’ll easily alert you, enabling you to take the appropriate measures. On the other hand, RFID tags will help you to keep track of environmental factors such as humidity and temperature which might interfere with your goods.
- Ensure The Company Has A Well-Structured Contract
Before signing a contract with a cargo company, you want to ensure that their contract is well-structured. You should be able to read and understand their terms, expectations, responsibilities, scope of work, and obligations. The contract should also highlight dispute resolution procedures.
A detailed contract will enable you to have a clear understanding of expectations and minimize room for fraudulent actions. If the contract adheres to the set industry standards, you’ll likely have a reliable business relationship with the carrier company you choose.
Another aspect that you should check in the contract is indemnity and liability clauses. Accidents can occur, and if they do, you want to be sure that the company will be liable for the theft or damage of your cargo. These requirements and commitments should be clearly stated in the contract. The clauses should also precisely state who’s responsible for the legal costs if a dispute arises. You can contact a legal professional to review these clauses before signing on the fine print.
You also need to know that regulatory requirements for transportation contracts vary by region. The contract you sign should comply with all the regulations of your state. A contract that doesn’t adhere to these rules can be prone to fraud.
The Bottom Line
Cargo is the lifeblood of businesses. In case they’re stolen or misplaced as a result of fraud, your company’s bottom line may be greatly affected. Adhering to these three lines of defense can protect your goods against fraudsters.