Almost 70% of carriers acquire the majority of loads from freight forwarding companies. Unfortunately, one can always come across fraudulent contracting parties, which results in dealing with numerous scams or frauds. It is therefore necessary to ask yourself how to verify forwarding companies to minimise the risk.
Verifying the documents
The first step is to verify the documents necessary to carry out gainful activity, such as:
- entry in the Register of Business Activity
- certificate of Tax Identification Number assignment
- licence for providing intermediary services in the transport of goods
Each of them should be the original document or a copy certified by a notary, and in the case of licenses they should also be verified in terms of validity date.
Verifying the freight forwarder’s liability insurance
While verifying the freight forwarder’s liability insurance, the following aspects should be taken into account:
- insurance coverage
- insurance conditions
- sum insured
- restrictions relating to the exclusion of liability
To do so, you can contact the company that issued the policy to confirm the information obtained.
Determining the review
No less important aspect of the verification process is to determine how the counterparties speak about a specific company. While checking a potential business partner, always remember about their:
- reviews on the Internet and on transport exchanges
- order history
- presence in the registers of debtors
It is worth remembering that there is no such thing as the perfect method to identify a fraud. Nevertheless, the more levels of verification are used, the greater the likelihood that the transaction will have a positive outcome.