A recent Wall Street Journal report [1] illustrates the growing problem of double-brokering fraud in the cargo industry. The increasing prevalence of these schemes makes it ever more necessary for logistics brokers to have complete visibility through all layers of the motor carriers they work with.

Double-brokering schemes involve bad actors who impersonate motor carriers, negotiate deals to carry cargo, and then hire another carrier to deliver the cargo. In its least malign form, the actual carrier’s rate is cheaper than the originally negotiated rate, and the fraudsters keep the difference. In more extreme cases, the cargo is diverted entirely (the primary example cited by the Journal shows criminals attempting to ransom a shipment for forty thousand dollars).

SCI, unlike some other third-party administrators, processes payments directly to individual owner/operators, not just to master contractors. In validating the identity of individual owner/operators and ensuring a secure transfer of funds, SCI’s logistics broker clients have more knowledge about who exactly is carrying the cargo they broker. Access to this information is a powerful deterrent against these increasingly common double-broker schemes. Logistics brokers should take whatever steps necessary to obtain such transparency into motor carriers and prevent themselves from falling victim to these double-brokering schemes.

With the right levels of visibility in the Master Contractor model, your business operations will minimize liability for maximal growth. Achieving the right balance of visibility into the supply chain is easier with a third-party administrator that knows your business and has a relationship with the Master Contractor. SCI is the solution you are looking for.

If you have any questions about why the Master Contractor model should be done with SCI at your side, contact us at 1-800-321-5344.

[1]“A Brazen Yogurt Heist Shows How Cyber Gangs Are Hijacking U.S. Goods”, March 24, 2024, https://www.wsj.com/business/logistics/a-brazen-yogurt-heist-shows-how-cyber-gangs-are-hijacking-u-s-goods-7a8c1843.

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