International criminal rings are taking advantage of the "lackluster" federal efforts to fight freight fraud which has cost the supply chain and Americans "well over a billion dollars."
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WOC had the pleasure of speaking to Chris Burroughs, CEO of the Transportation Intermediaries Association (TIA). In our eye-opening talk, he discussed the extremely multifaceted issue of freight fraud and cargo theft that costs the country a staggering amount of money.
What's worse, is that the federal government doesn't seem to care.
Freight fraud has been on the up in recent years. According to the TIA Fraud Framework, there was a "600% increase in cargo theft between November 2022 and March 2023." Despite this, the government is not doing a lot.
Alarming, there are only "30 individuals tackling cargo theft" across the United States. "Law enforcement is not robust in this area," Burroughs explained. With less than one person per state, it's no wonder criminal organizations are running rampant and carrying out freight fraud nationwide.
When the TIA asked the federal government in 2021 about the number of complaints associated with freight fraud, they received back a number in the 80,000s. "They had not addressed or adjudicated any of these," Burroughs stressed, "There's no activity from the FMSCA."
The worst part is the effect on the consumer, however.
Freight Fraud Has Stolen Over A Billion Dollars From Americans
I asked Chris Burroughs how stolen cargo and trucks translate to higher goods costs. Fraud forces up the price of insurance as it happens increasingly often. As the supply chain pays higher and higher amounts in insurance, they up the prices of their merchandise.
As everything becomes more expensive to accommodate fraud, the goods on the shelves will see increased prices thanks to how much it costs to get them there.
"The Wall Street Journal put a figure out of $800 million annually a few years ago, quite frankly, it's well over a billion dollars that this is costing the supply chain. And a lot of that cost unfortunately is bared by the consumer," he told us.
Burroughs is extremely passionate about this issue as the federal government can take simple steps to combat this costly epidemic. If "some simple things were put in place," then "a lot could be heated off on the front end."
Worryingly, no one knows what happens to the thrifted cargo. "What happens to this product? We don't know," he resigned.
What makes this issue even more complex is that it's an international issue. "There's a lot of high-tech companies out there who have blossomed around this area to address some of these concerns and they're tracking IP addresses and a lot of the fraud they're seeing is not based in the U.S," he reports.
IP addresses are being tracked to countries such as "Pakistan," "India," and even "Armenia."
International criminal organizations are costing Americans an absurd amount of money every year. And the federal government thinks it's fit for less than a few dozen agents to be cracking down on it.
