Freight Fraud, Fake Identities, and the Cost to the Supply Chain

Share this entry

Highlights

• Freight fraud incidents have surged 1500% since 2021, with $35B lost annually.
• Fake identities and counterfeit CDLs are driving a spike in cargo theft and impersonation scams.
• Businesses report average losses of over $400,000 due to fraud-related issues.
  65% of companies spend 2+ hours daily combating fraud, draining time from operations and sales.
• New federal enforcement on English proficiency aims to remove unsafe drivers from U.S. roads.
• Truck accident settlements can exceed $10M, especially when unqualified drivers are involved.
• ID verification and compliance tools can prevent fraud, ensure FMCSA compliance, and protect your bottom line.
• Free 15-minute consultation available to learn how to safeguard your business with TruDiligence.

Freight fraud is no longer just an industry headache—it’s a full-blown crisis. With billions of dollars lost annually and fraud tactics evolving rapidly, supply chain professionals are under pressure to defend their operations against a growing wave of criminal activity. Fortunately, innovative tools and technologies are giving businesses a fighting chance.

In this post, we’ll explore the alarming rise in freight fraud, including the use of fake identities and the impact of non-compliant drivers, and how your company can protect itself—before it’s too late.

Freight Fraud by the Numbers

The latest TIA April 2025 Report on Fraud paints a sobering picture:

• Cargo theft alone accounts for $35 billion in annual losses
• Incidents have surged by 1500% since 2021
• 31% of companies report losses between $10,000 and $200,000
• The average loss per company tops $402,000
• 65% of businesses spend over two hours per day battling fraud

Chris Burroughs, TIA President & CEO, summed it up:

“Strategic fraud and cargo theft in our industry has reached a boiling point. It’s no longer an inconvenience—it’s a crisis.”

The goal of pre-employment screening is to minimize the risk of hiring individuals who may pose a threat to the organization’s safety, reputation, or compliance.

Identity Fraud: The New Front Line

One of the most dangerous trends driving this crisis is the use of fake identities. Criminals are impersonating licensed motor carriers using stolen MC numbers, or worse—creating counterfeit commercial driver’s licenses (CDLs) using websites readily accessible on the open internet.

These fake IDs can mimic state-issued licenses down to the barcode, watermark, and photo. However, what they can’t duplicate is the encrypted data linked to the DMV and FMCSA systems—unless your business uses proper ID verification tools.

English Proficiency and Road Safety

According to the National Highway Traffic Safety Administration (NHTSA), drivers who can’t understand English are linked to 15% of fatal trucking accidents. With an estimated 130,000 undocumented truckers on U.S. roads, the risk is growing.

In May 2025, U.S. Secretary of Transportation Sean Duffy reinstated enforcement of the English Language Proficiency (ELP) rule for commercial drivers, stating:

“A driver who cannot understand English will not drive a commercial vehicle in this country.  Period. ”

Drivers who fail to meet this federal requirement will now be placed out of service—a crucial move to protect lives and uphold standards in the industry.

The High Price of Non-Compliance

Every minute spent chasing down fraudulent claims is time lost from operations, sales, and service. Smart businesses are shifting from reactive to proactive fraud defense strategies—with ID verification, background checks, and ongoing compliance tools at the core.

As Chris Burroughs of TIA said:
“Our members are telling us loud and clear: they need more support, better tools, and stronger action from federal regulators.”

Fraud Prevention Isn’t Optional—It’s Operational

Green Path Tech is delighted to partner with TruDiligence to help companies hire legitimately and effectively with ID verification, 90%+ Day 1 turnaround times on background and drug screenings, quick ATS integrations, and ongoing DOT clearinghouse with no contracts, monthly minimums, or set up fees. A few topics that Eva Rumble and Andy Hedrick at Green Path Tech cover during this episode:

• How fraudsters are creating and using fake IDs to commit fraud
• The legal and financial ramifications of non-English speaking drivers and cargo theft
• ID verification technologies that significantly reduce the risk of ID theft and fraud

Fraud Prevention Isn’t Optional—It’s Operational

Hiring drivers with fake or expired licenses—or those who can’t meet language requirements—puts carriers at immense financial and legal risk. Consider these consequences:

• Truck accident settlements range from $100,000 to over $10 million
• Carriers can be held liable for hiring unqualified or undocumented drivers
• Legal fees, insurance hikes, and reputation damage can cripple a business

Verification technology not only keeps you compliant with FMCSA regulations, it can prevent lawsuits, protect your brand, and save millions in the long run.