The fraudsters are collaborating. It’s time the good guys did too.

Fraudsters are sharing warehouses, swapping drivers, and coordinating across networks. The people trying to stop them are still working alone.

That’s the gap Dale Prax has spent years trying to close. Prax is the founder, president, and CEO of Collaborative Rating Systems (more widely known as FreightValidate.com) and a strategic fraud advisor and advocate at Truckstop.com. Prax joined Malcolm Harris on What the Truck?!? to lay out a vision for cross-platform collaboration between vetting companies, a closer working relationship with federal regulators, and a shared sense of accountability that extends to every party in a freight transaction, from the driver at the dock to the broker booking the load.

The conversation picks up where Prax left off during a December appearance on the show, where he first floated the idea of bringing competing vetting platforms together. Five months later, the idea is becoming a meeting on the calendar, with the FMCSA at the table.

The bad guys are already collaborating

Prax has been making the argument for collaboration among vetting and onboarding platforms since at least 2022, when a wave of new fraud-prevention companies began entering the market in response to surging cargo theft and identity fraud schemes. The problem, as he sees it, is that even with more tools in the ecosystem, the bad actors are still finding ways through.

“We all know that the bad guys are collaborating with each other,” Prax said. “They own warehouses, they  share truck drivers, so they’re collaborating very closely.”

Coordination on the criminal side has created a gap problem. A carrier flagged in one vetting platform might sail through another with no issues.

“I get calls all the time from people who don’t understand why they’re not validated in our platform,” Prax said. “Some people can fall through the crack, which is why we have to bring the systems together.”

Why sharing intelligence beats sharing algorithms

His proposed fix doesn’t involve simply sharing proprietary algorithms or trade secrets between competing platforms. The key, he says, is sharing intelligence, such as verified, time-consuming findings that individual companies are already producing in isolation.

“It takes several months to a year sometimes to get information from the Freedom of Information Act office to prove a guy is a bad guy,” Prax explained. “So if I’m doing it, I should be able to share that with the other vetting platforms and let them know we’ve proven if someone owns 15 MC numbers and has not disclosed that affiliation, or if he lives outside The United States, but he lied in his application.”

If one platform has already done the investigative legwork to uncover a fraudulent operator, every other platform in the ecosystem should benefit from that finding rather than duplicating the effort (or worse, never catching it at all).

What was once a theoretical pitch is now materializing in practice. Prax described a pivotal conversation with Derek Barrs at the Transportation Club of Jacksonville that turned into a formal invitation to Washington, D.C. When Prax sent the invite out to vetting platforms across the industry, the response was immediate.

“When I sent out the list to all the vetting platforms that I know, the immediate response was a resounding yes,” Prax said. “It’s really refreshing to see that happen.”

What the FMCSA can and can’t do

The meeting, scheduled for May 14, will bring together not just vetting companies but also representatives from the Federal Motor Carrier Safety Administration (FMCSA). Prax considers that pairing essential. For too long, he argues, the private-sector fraud prevention community and federal regulators have operated without a clear understanding of what the other side can and can’t do.

“A lot of us vetting companies may not know the limitations of the FMCSA,” Prax said. “We don’t know where their hands are tied.”

He pointed to a specific legal constraint that most of the industry may not be aware of: a case called FMCSA v. Darlene Riojas, 7 Star Transport, and Four Star Trucking, in which  Administrative Law Judge J. E. Sullivan ruled in 2019 that the agency lacks the authority to impose civil penalties. That kind of limitation changes the calculus for how fraud gets addressed at the federal level.

“Vetting platforms and onboarding platforms need to know what their limitations are,” Prax said. “They also need to know what our capabilities are so we can help each other. Maybe the agency can’t do something, but we certainly can.”

That means the private sector may need to serve as a de facto enforcement layer in cases where the regulatory process is slow or legally hamstrung, recommending against the use of carriers that shouldn’t have been granted operating authority in the first place, even while the formal legal process plays out at the FMCSA.

The real cost of cargo theft

The actual dollar cost of cargo theft is still an ongoing discussion between industry voices who have offered widely varying estimates, but Prax is working to resolve that.

“You can’t know the cost of cargo theft until you define the cost of cargo theft,” he said.

Removing that ambiguity starts by understanding what the industry is measuring. The cost to manufacture the stolen goods, the retail value, and the wholesale price are all going to give wildly different numbers when it comes to value lost. Even once you settle on a definition, you’re still only looking at reported incidents.

Expert estimates vary from up to a billion lost annually to 6.6 billion annually. “Now how about unreported fraud?” Prax asked. “We don’t know what that answer is because it’s unreported.”

He pushed the lens even wider, suggesting that the downstream costs (including lost customers, forfeited revenue, and damaged relationships) are rarely factored into headline figures. 

“I like to compare it to the cost of war,” Prax said. “What’s the cost of war? Is it the cost of the bullets and the bombs? Or is it the cost of the bloodshed and damage that would happen on the battlefield? There are a lot more costs to go with it. It’s also the cost of the counseling for the grieving person that lost their son or daughter.”

Either way, Prax says, if the industry underestimates the scope of the problem, it will underinvest in the solution.

Vetting platforms aren’t the problem – how people use them is

Prax pushes back on the assumption that vetting platforms are the weak link. The tools, he says, are generally doing their job. The problem is how people use the information those tools provide.

“Too many people have used vetting platforms as a crutch rather than a tool,” Prax said. “For any cargo theft or even fraud that I’ve investigated, it’s rarely the fault of the vetting platform. It’s a fault in not following through with a proper process after you get the information.”

There are still many kinds of checks that require human judgment: verifying the driver, confirming the carrier isn’t operating as a chameleon, ensuring the shipper is doing its part. No algorithm replaces the person making the calls.

“There is no algorithm that can make a decision for you,” Prax said. “It can lead you to your decision faster, but the decision belongs to the person.”

Everyone in the transaction has a responsibility

Brokers, carriers, shippers, and tech providers all need to step up, according to Prax. Even drivers, he says, have a responsibility to exercise good judgment. 

“The driver has a responsibility,” Prax said. “The driver has the ability to ask questions. If you show up at a shipper’s dock, the first question you should ask is, ‘who did you broker this load to?’”

The accountability runs both ways. The shipper should be asking the driver who assigned the load. The broker should be confirming the carrier’s identity. Everyone in the transaction has a role.

Prax implores the entire freight community to stop being passive.

Secretary of Transportation Sean Duffy told the audience at the Mid America Truck Show to “stop bitching at the windshield” and start engaging directly with elected officials. An unprecedented 19 trucking-related bills are currently before Congress, including the Combating Organized Retail Crime Act and the Household Goods Shipping Act which would restore the FMCSA’s ability to impose civil penalties.

“Write to your representatives, call them,” Prax said. “Tell them to get these bills passed.”  

The threat has moved well past the point where any broker, carrier, or shipper can afford to act in isolation.

“I don’t care which vetting platform you use,” Prax said. “Use somebody. You can’t do it on your own.”

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