Small business trucks need protection from increasing freight fraud cases, said Ooida Lewie Pugh’s executive vice president a Senate subcommittee.
“Fraud is on the growth of trucks, as criminals have discovered many weaknesses within our industry,” Pugh wrote in his testimony. “Interested parties are doing everything they can to protect themselves from criminals, but their abilities are extremely limited. A small business trucker lacks resources to prevent overseas deceptions or authority to ensure that intermediaries respect existing transparency regulations. supporters, motor carriers and intermediaries. “
Surface transport of the senate, goods, pipelines and subcommittee of security held a hearing on Thursday, February 27 to examine the increasing problem of cargo theft and fraud of goods along the US supply chain.
Cargons and repair reported large increases in cases of fraud of goods in 2024, and the Association of Transport Intermediaries estimated that the US supply chain is about $ 1 billion a year. Sen Sen Sen Sen. Todd Young, R-Ind., Set statistics during the hearing that suggested that the overall problem of cargo theft could cost up to $ 35 billion each year.
Pugh testified to provide an overview of how the fraud of goods negatively affects trucks and the general industry. The Independent Association of Drivers of Owner-operator represents approximately 150,000 small business trucks.
“Unfortunately, small truck businesses are both affected by fraud and less likely to be able to recover from an incident,” Pugh wrote. “Most often, motor carriers are responsible for losing loads due to fraud, with costs ranging from tens of thousands to hundreds of thousands of dollars per incident.”
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He added that there have been some incidents of ooid members coming out of business after a case of fraud.
“This is not hyperbole,” Pugh wrote. “While large carriers are best equipped to absorb the cost of fraud, it only needs a single phenomenon to break down a small truck business.”
Types of fraud of goods in trucks
Tuckers fall victim to fraud and fraud of goods in different ways.
As part of his testimony, Pugh said the most common scenario is when trucks are targeted by fraudsters who present as legitimate intermediaries.
“First, many small truck businesses fall victims of double mediation,” Pugh wrote. “This is when criminals present as engine carrier to get cargoes from the brokers, then posing as mediators seeking trucks to complete the loads. When the goods are delivered, the lawful broker issues a payment to the fraudulent actor, and the trucks that have actually loaded the load is high and dry.”
Other examples include theft of an intermediary’s identity, reassessment schemes and theft of an identity of a motor carrier.
Adam Blanchard, CEO of Tanager Logistics and Double Diamond Transport, broadcast an example of how his company was victimized.
“About a year ago, our American dream turned into a nightmare when some unscrupulous criminals stole our identity,” Blanchard said. “By capitalizing our good name, they damaged the reputation we spent over a decade to win.”
Blanchard explained that criminals posed as Logistics Tanager through a false email account and mediated cargoes for non -suspected motor carriers, who delivered the loads while pockets pocket money. In one example, criminals received a load of energy drinks worth more than $ 100,000, Blanchard said.
Pugh said the problem of fraud of goods is exacerbated by the lack of response from the Federal Security Administration of the motor carrier. Last year, the agency issued a report on the illegal activity of the broker in the truck industry. In the report, FMCSA said he lacked data to determine whether fraud had a negative impact on security and that there was no legal authority to evaluate civil sentences for violations.
Sen. Gary Peter, D-Mich., Asked Pugh to explain why fraud of goods is a matter of security.
Pugh said these crimes can force small motor carriers, who are already running in few profit margins, to delay critical maintenance or repairs. Moreover, it can get secure trucks from the road completely.
“It can be so bad that they finish to close their business and sell the truck,” Pugh said. “And the real aspect of the safety of this is that most small business owners have 20 to some years of experience or more. So you are getting an experienced and well-trained truck from highways, who are the people we need to keep-not missing.”
Resolution
At the beginning of this year, the consumer protection act of household goods was introduced in the room and the Senate. The Bipartisan Law would restore the FMCSA authority to issue civil sentences against bad actors. The legislation would also require brokers, goods carriers and carriers to provide a valid business address at FMCSA before winning the operating authority.
The attempt is supported by ooida, American truck associations and transport brokers association.
“We encourage all senators, especially members of this subcommittee, to support this important legislation,” Pugh said.
Ooida is also encouraging regulators to issue a final rule to strengthen existing intermediary transparency regulations. A proposal is open to public comment until March 20.
“While motor carriers are increasingly victimized by the fraud of goods, outstanding claims, suspicious charges, unpaid loads, two -broker loads and load compresses schemes, the current lack of transparency has left them little to protect themselves from fraud,” Pugh wrote.
Other suggestions included the closure of intermediary bonds gaps, improving and renamed the national customer complaint database and the creation of a new registration system. Ll