Fraud Lives in the Gap – TEG

Most freight fraud is not caught at the gate. It is caught too late, in the gap that opens between the moment a carrier is onboarded and the moment anyone looks at their paperwork again. For enterprise logistics teams operating in a market where capacity tightens by the week and insurance cancellations are routine, that gap is the real exposure. Closing it is a resilience question, not an admin one.

Ask most enterprise logistics teams how they manage carrier risk and the answer sounds reassuring. Onboarding is rigorous. KYC, operating licence, insurance schedule, VAT status, references, financial health. The file is thick. The box is ticked. Then the carrier disappears into a spreadsheet and the next review is quietly set to twelve months away.

TEG research found that 3PLs are, on average, unable to audit 68 per cent of their carriers at least once a year. Separate research across six leading UK 3PLs found that 83 per cent audit fewer than 10 per cent of their sub-contractors annually. That is the fraud window. Not at the front door, but in the months that follow, when an insurance policy is cancelled, an operating licence is revoked, or a business quietly changes hands.

According to a TEG industry study, up to 30 per cent of courier insurance policies are cancelled each month, and those cancellations often go undetected until an incident occurs. The information gap between insurers and the operators they cover is widening at precisely the moment the threat is escalating.

This is not a visibility problem. It is a frequency problem. The checks themselves are not wrong. They are just too far apart. A model built around static onboarding cannot keep pace with a carrier market where compliance, ownership and financial health all shift week by week.

The practical answer is to shift from verify once to verify continuously. That is the principle behind Trustd, TEG’s independently certified digital identity platform, which monitors carrier credentials in real time and alerts the network the moment a policy lapses or a licence changes status. Paired with a large pool of already vetted alternatives, it means that when disruption hits, the switch to a compliant carrier is measured in minutes rather than weeks.

For enterprise operators, that is what resilience actually looks like in practice. Not a strategy deck. A continuous check that closes the gap fraud has always relied on.

Author

Lyall Cresswell, CEO & Founder, TEG