The news in early April that freight payment and audit services provider Trendset was beset by internal embezzlement and fraud has struck a nerve among shippers on how best to securely manage their transportation freight bills.
“The circumstances warrant a re-examination of the kinds of protections and safeguards shippers should expect when contracting with any freight payment and audit provider,” said Richard Langer, managing director of freight payment consultancy Quetica. “Since shippers contract with a new freight payment and audit provider infrequently, they often do not have the in-house domain expertise to effectively evaluate and manage their risks in the procurement process, overlooking normal industry practices.”
Indeed, American Shipper’s research director and IT editor Eric Johnson pointed out in his coverage of the Trendset ordeal that shippers often think only of the fees they pay to their vendor as being potentially vulnerable, when in reality, the larger sum that could be vulnerable is the millions of dollars the shipper passes on to the vendor for the purposes of paying its carriers.
The total sum affected by the alleged malfeasance within Trendset is yet unknown. However, with the FBI and other regulatory authorities now involved in the investigation of this firm, the entire freight payment industry — banks and non-banks — would be advised to seriously review its internal risk management procedures to ensure integrity is maintained and avoid a similar fate. – Chris Gillis
Commentary: Readers reflect on Trendset meltdown
