Do you like writing emails and responding to quote requests? How about entering orders or setting pickup and delivery appointments? Did you answer “none of the above”? If so, you’re in good company.

Fortunately, trucking and logistics companies have many options for replacing time-consuming business functions with AI-powered solutions. Given present circumstances, AI's most important capability is detecting anomalies in freight transactions to thwart fraud.

The digital revolution gives transportation companies many opportunities to expand automation, but it also adds more threat vectors. For example, fraudulent entities are using phishing schemes to steal the login credentials of legitimate carriers and brokers to access load boards and gather information about companies’ assets and customers.

Freight fraud and cargo theft are being perpetuated by entities who use AI-powered tools to create realistic emails and websites that trick people into sharing sensitive information.

Skyrocketing Freight Fraud 

At this point, most companies in the transportation and logistics industry have seen and felt the impact of rampant freight fraud and cargo theft. According to CargoNet, cargo theft incidents jumped 57% between 2022 and 2023, and shipping fraud (defined as when a seller receives payment for goods or services, but never ships to the buyer) skyrocketed 780%, as tracked by a TransUnion report.

Fraudulent trucking activities already cost the industry $500-$700 million annually, according to a 2023 study by the Transportation Intermediaries Association (TIA). Even more alarming was that 2023 was the worst year for data breaches, up 78% from 2022. Ransomware attacks can put companies out of business.

Preventing data breaches and fraud is even more crucial in today’s challenging freight market. This blog explores how using an AI-powered transportation management system (TMS) is essential for companies to prevent fraud and enhance cybersecurity.

Bringing the Power of AI to SaaS

Compared to a traditional “on-premise” setup, a modern SaaS or cloud-based TMS offers numerous advantages, including greater scalability, predictable costs, seamless workflows, and automated business processes.

Increasingly, the most significant benefit of AI to trucking is amplified security. Here’s how to look for this advantage in a modern SaaS-based TMS.

1. Up-to-Date Firewalls, Advanced Protocols, and Encryption Techniques

A cloud-based TMS with advanced protocols and encryption techniques will establish secure communication channels between the system and authorized users' web browsers. These protocols should include Transport Layer Security (TLS) and Secure Socket Layer (SSL), commonly used in online banking to establish a firewall-protected TMS environment.

Additionally, look for a cloud-based TMS that quickly and easily stays updated with the latest security patches and protocols. (For more information on preventing invoice fraud, check out this blog.)

2. Secure Business Transactions

Motor carriers and freight brokers can mitigate AI-driven fraud by using a TMS platform that enables them to conduct business directly with each other through structured data formats and secure integrations. For example, Magnus TMS's Carrier Advantage Network enables secure transactions within a private broker-carrier network, reducing reliance on public load boards to enhance security.

3. Identify Anomalies and Threats

Since the transportation and logistics industry is highly transactional, bad actors can steal identities and penetrate networks to redirect freight payments and cargo or instigate ransomware attacks.

To prevent ransomware attacks, you must identify anomalies and threats immediately and neutralize them before they cause harm. SaaS-based TMS solutions that use world-class data centers can analyze real-time network traffic, user behavior, and endpoint activity to detect ransomware within seconds. The solutions also leverage AI to triage, investigate, and remediate threats automatically.

4. Improved Processes

AI improves repetitive processes through intelligent automation, enhancing efficiency and accuracy. For example, AI tools can improve freight pricing, order management, planning, and other functions, reducing manual, error-prone tasks and reducing the points of entry for cybercriminals to interact with humans. 

5. Intelligent Risk Management

An AI-powered TMS that simplifies work for end users can also immediately alert to potential risks with internal features and third-party monitoring services that detect anomalies to secure transactions and data.

Stay ahead of fraud and enhance your data security with an AI-powered TMS

Digitization of the trucking and logistics industry has significantly increased the volume and data and expanded the footprint of system integrations. With these benefits comes heightened security risks and rising cargo theft, shipping fraud, and data breaches.

Implementing an AI-powered SaaS TMS that provides robust solutions to these challenges will improve processes while securing business transactions and intelligently detecting anomalies and threats. Leveraging AI-driven capabilities in a TMS is essential to fortify and safeguard operations to maintain a competitive edge in a demanding market.

For more information on how an AI-powered TMS can deliver immediate ROI to your fleet, download our latest guide or schedule a customized demo of the Magnus Platform today.