Carrier Vetting Challenges in Trucking
The trucking industry is experiencing a new wave of technology adoption aimed at improving security and reducing fraud. However, the rise of “carrier vetting” seems to be causing more harm than good for legitimate trucking operations. Many owner-operators and small fleet owners argue that the trend of rigorous carrier vetting, driven by brokers, makes it harder for honest, experienced carriers to access the freight they need to stay in business.
The Emergence of Carrier Vetting
Fraud and cargo theft in the freight market have surged to alarming levels in recent years. To combat issues like double brokering, identity theft, and cargo theft, brokers and carriers have turned to third-party carrier vetting services. Companies like Carrier Assure, Verified Carrier, and Freight Validate offer verification services that authenticate carrier credentials, monitor safety ratings, and identify potential risks in real time.
Brokers increasingly incorporate these vetting tools to protect shippers and themselves from fraud. While these services aim to address the fraud epidemic, many trucking professionals believe they create additional obstacles without fully solving the problem.
The Frustration of Small Carriers
A recent onlone survey revealed that nearly 64% of respondents believe carrier vetting services bring no benefits to the trucking industry. Many owner-operators and small fleet owners feel that these services create barriers for legitimate carriers rather than addressing the root issues.
Gabriel Scott, an owner-operator, shared his frustration with the vetting process. After negotiating a fair rate for a 250-mile load, the broker requested a photo of his driver’s CDL and a picture of the truck showing its MC and DOT numbers. The broker also asked the driver to hold up a sign with a specific number in front of the truck—just to book a load. Although such extreme requests are rare, they exemplify the growing burdens small operators face to satisfy excessive vetting requirements.
The Rise of Fraud and the Vetting Response
Fraud incidents, including double brokering and cargo theft, have risen sharply, prompting brokers to adopt more stringent measures. From Q1 2024 to Q2 2024, Truckstop’s load board recorded a 33% and 46% surge in fraud instances, respectively. CargoNet, a cargo theft monitoring company, reported a staggering 1,445% increase in cargo theft events between Q1 2022 and Q1 2024.
These alarming trends fueled the demand for carrier vetting technologies. While brokers hope these tools ensure the legitimacy of carriers, concerns persist about their limitations. Frank Matarazzo, a mid-sized brokerage owner in New Jersey, pointed out that no single solution can completely prevent cargo theft. He explained that vetting systems rely heavily on data, which bad actors can easily manipulate or fake to bypass detection.
Fraud persists even with advanced vetting systems due to the complexity of modern supply chains. Experts recommend a comprehensive approach that includes on-the-ground verification alongside rigorous vetting processes, which automated systems cannot fully replicate.
The Negative Impact on Small Fleets and Owner-Operators
Small fleets and owner-operators bear the brunt of the carrier vetting trend. Many of these carriers, despite their impeccable safety records, encounter unfair penalties due to the system’s inability to account for smaller operations. Some carriers lose access to loads because they lack inspection records or have recently acquired their operating authority.
The system also disadvantages expedited fleets and new carriers with minimal inspection histories. These carriers often receive low ratings, which jeopardize their ability to secure future contracts, even though they operate legitimately.
The Cost of Carrier Vetting
Carrier vetting imposes significant financial burdens on both brokers and carriers. Services can cost upwards of $2,500 per month, and their outcomes are not always clear-cut. While brokers value these tools, they acknowledge their limitations. Matarazzo noted that his brokerage incorporates vetting tools into its fraud prevention strategy but does not rely on them as the sole solution.
Many carriers experience the shortcomings of these systems firsthand. They often pay high fees for vetting services, only to find that they fail to deliver consistent results. The rising costs, combined with increasingly complex compliance requirements, leave small carriers struggling to remain financially viable.
Is There a Solution?
Although the available technology helps brokers combat fraud, the industry must address the problem more holistically. Educating brokers and carriers about fraud risks and prevention strategies could improve the effectiveness of vetting systems.
Awareness campaigns can highlight the diversity of carriers, including expedited fleets and new entrants with limited inspection histories. Experts like Scott Cornell, a cargo theft specialist, emphasize the importance of brokers implementing better procedures and working closely with carriers to verify legitimacy. Cornell believes that issues arise not from the software itself but from brokers bypassing or misusing these systems.
Addressing systemic problems such as the resale of MC numbers and the market for stolen identities remains crucial for tackling fraud. Despite advancements in technology, human error and insufficient diligence perpetuate these issues.
Conclusion
Carrier vetting presents a double-edged sword for the trucking industry. While it addresses the pressing issue of fraud, it also creates unnecessary burdens for legitimate carriers, particularly small fleets and owner-operators. Brokers and technology providers must rethink their approach, emphasizing education and tailored solutions instead of relying solely on automated systems. Without a more balanced strategy, small carriers will continue to struggle under the weight of these new requirements
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