Just as TMS systems became indispensable in the past, today’s transport platforms are now essential for transport and forwarding companies.
Their development has been incredibly dynamic. Over recent years, we’ve seen systems evolve from traditional transport exchanges to technologically advanced logistics platforms that integrate numerous tools.
This digital revolution has impacted many European suppliers of such tools, including the Polish company Trans.eu, which transitioned its old exchange to a new platform a few years ago. This transition came amid times of high emotions within the industry, including fears regarding cargo safety due to the scale of theft and fraud in the transport sector.
In an exclusive interview for trans.iNFO, Piotr Sobala discusses fraud on transport exchanges, the scale of theft, and the preventive measures taken by Trans.eu.
Michał Pakulniewicz, trans.iNFO: Let me start with a question that concerns many supply chain participants. What is the scale of theft on transport exchanges?
Piotr Sobala, International Security Area Leader at Trans.eu: In recent years, the number of thefts on exchanges has been increasing. However, considering the annual scale and the number of dishonest companies in the industry, it remains a small percentage of crimes.
The problem is that each incident generates a significant response and commotion within the community. Moreover, criminals continually refine their methods and become smarter. On our platform, compared to others, such incidents are relatively rare.
Who commits fraud on stock exchanges: carriers, forwarders, or shippers?
I have observed these events for over 10 years. It’s cyclical: sometimes cargo thefts are more common, and at other times, forwarders try to extort transport services. Currently, cargo theft has become more prevalent over the past two to three years.
We have managed to reduce the activities of dishonest forwarding and loading companies, but now transport companies present greater challenges. These are not fictitious companies; the problem lies in their intentions.
What influences this, the market situation?
Yes, it’s possible. In our preventive measures, we consider the periodic nature of criminal activities. We are also aware that mechanisms driving specific types of fraud often originate outside our platform. A few years ago, transport service scammers posed a significant challenge.
These companies, often based in virtual offices, operated as trustworthy shipping firms for some time. The fraudsters built a positive reputation, received good ratings, and operated flawlessly for up to six months. Then, they stopped paying on time and disappeared after the payment period ended, defrauding hundreds of carriers in the process.
How did you tackle this problem?
We acted on two fronts. First, we changed our procedures to raise entry barriers for companies exhibiting criminal patterns. We scrutinised companies that had been in the market for a short time and lacked documented industry experience.
Secondly, we launched an educational and informational campaign to increase awareness within the transport community about red flags to watch for when selecting contractors. We also wanted to raise awareness that Trans.eu has a security team that responds to all customer alerts.
Statistical data from our Security Team indicate the campaign’s success. In 2023, compared to the previous year, we received twice as many reports from clients about suspicious behaviour on the exchange, and the scale of fraud has significantly decreased.
After tackling dishonest forwarders, what about carriers? What are their fraudulent methods?
Increasingly sophisticated fraudsters try to lower our vigilance and that of potential contractors. Contrary to popular belief, fictitious companies are not a significant issue, as such entities cannot register on our exchange.
Our authorisation procedures ensure we always know a new user’s status. However, on foreign platforms, impersonation of existing transport companies is common.
Does this occur on exchanges or outside platforms?
Fraudsters use various models. Trans.eu verifies the identity of companies seeking access to the transport exchange, preventing such entities from entering our system. However, attempts to impersonate other companies outside the exchange using very similar contact details are common.
Rearranging letters in email addresses, especially those in the public domain, is a frequent tactic. Avoiding cooperation outside official communication channels in the Trans.eu system can prevent such problems, a point we emphasise to our community.
Another model involves long-established companies where the owner changes without the clients’ knowledge, as the data—names, phone numbers, emails—remain the same. Even if this change is reported, updating the data in the National Court Register can take months, during which theft can occur.
How can one spot suspicious behaviours?
Criminals continually refine their methods to avoid suspicion. For example, we observed a mechanism where the risk of theft increases for companies inactive for a long time but suddenly become active, registering several new employees on the platform. This signals a potential crime.
Fraudsters now avoid conspicuous actions, sudden activity changes, and multiple registrations. After taking over a company, they might continue operations without raising suspicion for weeks or months, completing orders and collecting positive reviews. Recent thefts often involved previously verified contractors who suddenly defrauded their partners.
I assume the targeted companies are small since no one would spend millions on one heist, correct?
Yes, these are typically small companies with limited capital, not part of any larger group. We encounter such cases several times a year and often see similar behaviours from different companies across various locations, indicating an organised network behind these frauds.
To deceive a carrier, one needs a laptop and access to the exchange. However, stealing a truckload of goods requires more capital and infrastructure. Are you surprised by the organisation of such operations?
Indeed, especially since specialised storage methods are sometimes involved. Recently, we’ve seen a rise in stolen frozen food, which requires specific storage conditions.
While thefts of non-serial numbered or easily liquidated goods are common, the increase in frozen food thefts is surprising, suggesting a well-prepared group operating under new company names. Although such events are rare, they are extremely costly.
Frozen fish is quite an unusual target, isn’t it?
We are also surprised, as it indicates improved preparation by thieves. Popular targets also include non-special storage foods, metals (copper, aluminium), photovoltaic panels, electronics, and chemicals like fertilisers and household products.
From what you’ve said, most frauds involve impersonation or company takeovers. Are there other methods?
A few years ago, a peculiar group of bus thieves emerged, targeting low-value goods like pallets, cardboard packaging, and plastic garden furniture.
Contrary to the belief that only large truck operators steal, data from last year showed identical numbers of thefts by bus drivers and truck company takeovers, differing mainly in scale and victim numbers.
How is this done in practice? Does someone buy a functioning company, operate normally, then disappear with a few large orders?
Exactly. Everything disappears, usually involving small companies with minimal fleets. We often contact the former owner, who provides all sale documents. These events typically involve small companies with small fleets.
How can one protect against this?
We are initiating a project to identify common points of interest in these companies’ behaviours on our platform. By defining specific suspicious activities, we can react earlier. However, implementing such solutions takes time.
When it comes to fraud by taken-over companies, our focus is on client verification, checking business status, seniority, and industry experience. We also require documented references and check for connections with previously banned companies.
The only aspect we cannot verify is intention. We continually develop tools to monitor actual activity on the platform.
Forwarders and clients must have their own security procedures and contractor verification systems, such as checking carrier’s liability insurance. It’s also crucial to note any changes in partners’ communication patterns. However, not every taken-over company is run by fraudsters.
What about liability and compensation for lost cargo?
Liability is a major issue for both parties. Clients report that insurance companies often try to prove forwarding companies were negligent in contractor selection to avoid paying compensation.
Forwarding companies face significant challenges recovering receivables and maintaining financial liquidity after major thefts.
Experienced companies with internal procedures and verification rules are often the victims. We aim to minimise theft cases, even though they are relatively rare but highly impactful.