Before digitalisation, relationships in the transport and logistics industry were built over time, through word of mouth and in-person interactions. Then businesses began to network, often subcontracting work to known associates, until eventually, there were several degrees of separation between parties. Yet, the sense of accountability felt by known entities was still present, if slightly diluted.
These days, the transport and logistics sector is increasingly digital. When you consider digitalisation and trust in this industry, you might think about how service for the end customer has improved, through live delivery updates or shipment tracking apps. These changes are undoubtedly positive, but the evolution of such a vast and fragmented sector comes at a price, particularly when it comes to the digitalisation of operations within the industry itself.
Transport and logistics has adapted to function successfully within the "platform economy", which is made up of hyper-efficient digital marketplaces, where service providers allow organisations to interact and transact on a borderless scale. However, the large number of transactions now taking place online brings with it significant lack of transparency regarding who you're actually transacting with.
Clear visibility is critical.
Logistics is a sprawling - and booming - global industry. While the growth facilitated by digitalisation presents huge business opportunities, it also means that many operators may not actually know who they're contracting with, who's driving their freight, visiting their site, or even paying their invoices.
From freight forwarders and 3PLs to carriers and drivers, a single shipment might go through seven or eight different organisations before reaching its destination, and that's before you consider jurisdictions or modes of transport.
Without clear visibility of the organisations within their supply chain, many businesses are left vulnerable to increasingly sophisticated forms of cargo fraud, identity theft and phishing scams, and now that risk is growing.
In the US, cargo theft just hit a ten-year high.
Throughout 2023, types of sophisticated cargo fraud like double brokering skyrocketed, seemingly out of nowhere. Data from CargoNet shows that in Q3 alone, documented strategic cargo theft events were up 430% year-on-year. The US market is waking up to that risk, and mindsets are changing about the appropriate response and precautions that must be taken. Some companies are investing in specific cybersecurity defences, while others are ensuring they've got the right cargo insurance cover in place.
Similar theft patterns are beginning to emerge in the UK - with over 3,000 cargo crimes reported to TAPA EMEA in the first nine months of 2023. These crimes resulted in a financial loss valued at over €79 million, but the transport and logistics sector here is still proving slower on the uptake.
These are figures that can't be ignored. We're witnessing an unprecedented and stratospheric rise in cargo crime that's wreaking havoc on the trust between entities, and calls for immediate action. Yet, it's fair to say we're working with a centuries-old industry that evolves very gradually, accustomed to making changes in a reactive rather than proactive way.
So how can we restore trust within the freight community, and minimise risk?
This was the founding principle for Trustd. We've created a comprehensive specialist ID and credentials solution, that was purpose-built for transport and logistics.
To minimise risk in the supply chain, stakeholders need complete visibility of the business credentials belonging to their suppliers and partners. On the Trustd platform, carriers, forwarders and drivers are invited to create a verifiable profile that contains the official status of their identity and business, as well as up-to-date documents like driving licence, operator licence and insurance certificates.
Trustd profile holders go through an advanced biometric ID process, and reputable external data sources - like Companies House - are referenced to accurately match the individual with the business entity. Once verified, this profile can be shared and reused almost indefinitely.
What could this mean for the wider industry?
With this technology, drivers, carriers and freight forwarders can offer their network much-needed proof of their identity, business status and credentials. So shippers and 3PLs are able to build out a network of trusted suppliers, and manageably maintain compliant working relationships with a whole database of connections.
When widely adopted, a business ID and credentials platform built exclusively for the transport and logistics industry effectively closes the loopholes that cargo criminals like fraudulent carriers can currently exploit.
These best-in-class practices are already being used to great success in the financial services industry - but applying them to our own sector will be absolutely transformative.