Quick Definition
Freight bill fraud occurs when billing documents are intentionally manipulated to overcharge, misrepresent services, or conceal unauthorized activity related to a shipment.
What Is Freight Bill Fraud?
Freight bill fraud may look like an accounting issue on the surface, but it often signals deeper operational or identity-based fraud.
In a typical scenario, a shipper receives an invoice with unfamiliar accessorial charges, inflated mileage, or adjusted weights. The shipment was delivered, so the bill gets paid—often without scrutiny. Over time, these “small discrepancies” add up to significant losses.
In more advanced schemes, fraudulent billing is used to launder proceeds from other crimes, including double brokering, misclassification, or identity misuse. Billing manipulation becomes the final step that monetizes fraud.
Real-World Scenario
A mid-sized shipper notices freight costs rising despite stable volumes. An audit reveals recurring detention charges at facilities where no delays were recorded.
Further investigation shows the same carrier identity appearing across unrelated invoices—later discovered to be a misused identity tied to a broader fraud scheme.
Why Freight Bill Fraud is Hard to Detect
Unlike cargo theft, freight bill fraud doesn’t stop freight movement. Deliveries still happen. Nothing is visibly missing. That makes it easy to overlook—especially in high-volume operations.
Common contributors include:
- Manual or paper-based billing workflows;
- Disconnected systems between operations and finance;
- Lack of standardized shipment data; and
- Pressure to process invoices quickly.
Key Warning Signs
- Duplicate or inconsistent invoices;
- Accessorials that don’t match operational records;
- Weight, distance, or service discrepancies; and
- Repeated billing issues tied to the same identity.
How NMFTA Helps
By promoting verified carrier identity and shared standards, NMFTA helps those in the supply chain confirm who they are releasing freight to—before the doors open.