Digital freight marketplace operator Transfix Inc. announced Thursday it has launched Transfix Shield, which aims to help shippers, carriers and brokers root out identity fraud across the commercial transportation industry.
Transfix Shield includes RateCon Shield and Facility Shield, tools available to all freight brokerages and shippers. The tools are designed to help users protect their business, as well as those of their carrier partners, and consumers from the impact of freight fraud, according to Jonathan Salama, Transfix’s CEO and co-founder.
“Fraud affects everyone. It’s like a full circle that begins with the shippers, brokers, carriers that are moving the freight,” Salama told FreightWaves. “When fraud happens in the freight industry, it costs brokers, carriers and ultimately it costs regular consumers, because it gets passed on to consumers.”
The Transportation Intermediaries Association (TIA) contends that fraud in trucking is costing the industry as much as $800 million.
“There’s a surge of malicious actors engaging in illegal activity, registering with the Federal Motor Carrier Safety Administration as carriers and perpetrating fraud, theft and holding freight hostage in situations without any legal consequences,” said Jeffrey Tucker, testifying on behalf of the TIA at a hearing before the U.S. House Transportation and Infrastructure Committee in January.
New York-based Transfix is a digital freight marketplace connecting shippers and more than 30,000 carriers. The company was founded in 2013 by Salama and Chairman and President Drew McElroy.
RateCon Shield adds a layer of security to a brokerage’s operation and the carrier’s business to detect bad actors impersonating legitimate freight brokers.
Fraudsters often pose as legitimate brokers, assuming a broker’s identity, and offer loads to carriers, according to Salama.
“After the carrier accepts and delivers the load, they contact the unknowing legitimate broker for payment, but the fraudster has disappeared and the carrier goes unpaid,” Salama said. “These frauds can cripple a carrier’s business.”
RateCon Shield works by automating the addition of a QR code to rate confirmation documents, helping carriers validate the authenticity of loads and the brokers offering them.
Transfix launched a pilot run of RateCon Shield last summer, which was well received by customers, Salama said.
“Since we launched it, we haven’t had any fraud issues, or haven’t heard of any issues or problems from customers,” he said.
Dan O’Sullivan, CEO of logistics provider United States of Freight, said RateCon Shield will be a differentiator in the freight industry.
“It builds credibility with both our shipper and carrier partners,” O’Sullivan said. “Partnering with an organization that had real skin in the game was also important for us. Transfix not only developed RateCon Shield, but they use it on every load.”
Facility Shield, which is in beta testing and soon to be available to shippers, provides fraud prevention capabilities at the facility level. The tool is designed to help shippers protect their facilities and associated loads through proprietary validation systems and processes that give shippers a new layer of security to verify carriers before they enter a facility, helping to reduce theft.
RateCon Shield and Facility Shield can integrate via API connection, are designed for a flexible and fast onboarding experience, and do not require users, whether carriers or facility employees, to download any additional apps.
Salama said both RateCon Shield and Facility Shield will be volume subscription-based services available to anyone who wants to use them.
“Fraud is an issue that will never get solved unless we all come together as an industry,” he said.
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