The methods to reduce fraud in logistics activities

To prevent fraud, logistics businesses need to strengthen inspection activities by cooperating with third parties.

To promote logistics activities, stakeholders need to establish a large network including suppliers, distributors, delivery partners... Unethical actions of a related party can directly affect the entire business activities. Many of them increase the risk of bribery and corruption. The growing franchise system in the logistics industry has also led to a significant increase in fraud.

The growing franchise system in the logistics industry is also leading to increased fraud.

Logistics businesses are prone to financial fraud due to high transaction volumes. Inspection to monitor fraudulent activity is necessary, in which, logistics service providers should work with third parties. It also prevents fraud related to payments, inventory, money laundering, etc. Without robust verification technology and post-risk assessment, frauds can go undetected in many months or years. In order to comply with legal regulations, logistics businesses must conduct criminal background checks, financial checks, address verification, KYC (know-your-customer) checks...

- Financial check: Bank account verification, GST (goods and service tax) verification, records, payments... In addition, validation and cross-checking parameters need to be defined whether the trading partner businesses are trustworthy or not.

- Check Database: Verify partners using proprietary databases, including legal records,...

- Reputation check: Check business identity references and prevent links with parties with signs of wrongdoing.

- Address check: Proof of address to verify the identity of customers, business partners of logistics enterprises, and prevent fraudulent activities and double transactions.

Besides, 3PL also allows businesses to take advantage of new supply chains, improve customer service and access new unexplored markets. This also means that much of their development depends on themselves.

Due to the fragmented market, a thorough appraisal of 3PL service providers is very important for logistics businesses to choose the right partner. Therefore, logistics franchise owners should check third-party references, business models, financial situation, etc.

Due to growth and increased demand, logistics companies need the fastest turnaround times to scale quickly. Even a small delay can affect the customer experience, hinder the growth of the business and have a profound impact on the bottom line. In particular, third-party verification automation is important to increase speed and scalability, and prevent errors in logistics.