Wilkens: Why AAA security is critical to preventing carrier fraud in transportation

Identity is the core of access control. When training in cybersecurity, we learn that there are three steps of verification required to allow access to data: authentication, authorization, and accountability (AAA). Let’s break these down.

• Authentication is when we confirm a supposed identity is authentic.
• Authorization is when we confirm that the identity claimed is authorized to access the data they are attempting to access.
• Accountability is how we monitor and track (audit) the data that has been accessed, modified, or deleted.

If there is a failure of any of these three stages, there is an opportunity for fraud. In transportation, this can mean fraudulent pickups, chameleon carriers, or invoice fraud. Any one of these is not good, yet recoverable. However, these lapses could lead to damaged reputation or decreased trust in an organization, leaving an organization with irreparable damage that is not as easy to recover.

Where identity verification fails across trucking networks

Ensuring proper AAA in trucking is not easy with the varied range of identities, including but not limited to: professional truck drivers, carriers, brokers, shippers, and third-party logistics providers (3PL), to name a few.

This is before we even begin to address technical identities such as artificial intelligence (AI) agents or non-human cloud integrations. Identity verification signals can get messy or are already weak for many of the types listed above. There is high churn, and new trading partners are onboarded all the time, often with significant time pressures involved. The result? An attacker can successfully insert themselves into the workflow with as little as one fraudulent identity claim.

Identity fraud, an authentication failure, can begin with an account takeover facilitated by stolen credentials or weak security controls. This allows a bad actor to impersonate a legitimate carrier, broker, or other member of the supply chain.

Weak internal controls allow a legitimate, authenticated employee who is engaged in fraud (aka: an insider threat) to gain access to or modify data they shouldn’t, resulting in a failure at the authorization control stage.

All too often, poor internal logging and visibility create an accountability failure, preventing the ability to catch misuse of identities until the damage has been done. Most fraud is not the result of one single failure, but a series of small flaws across the AAA process.

The secret to ensuring strong access control and fraud prevention lies in stronger shared trust signals and identity controls across the transportation sector. What does this look like? We need to ensure that the claimed identity is verifiable by multiple methods and does not rely on a single source. We need to ensure that verification is consistent and portable across the ecosystem and not rely on a patchwork of verification processes that are inconsistent from one interaction to the next.

This systematic approach to the issue of identity verification will result in faster and more reliable verifications, fewer bad actors successfully working their way into the transportation supply chain, and better auditability across the sector.

How fleets can strengthen AAA to prevent freight fraud

The Standard Carrier Alpha Code (SCAC) has long been a means of verifying identity across the transportation sector. However, with the dramatic increase in carrier identity fraud in the sector in the last several years, a weak point in this identity signal became apparent. Non-Class 8 carriers had insufficient proof of identity required in order to receive a SCAC, resulting in a weaker identity verification downstream. SCAC Verified was introduced in February to address this weakness and increase the authentication stage in the trading partner relationships involving these carriers.

By requiring a rigorous identity verification process as far upstream as possible (before being issued a SCAC code), this change dramatically increases the odds of tripping up would-be fraudsters before they are able to harm other members of the transportation sector. Tying a SCAC more tightly to a verified personal identity also improves the accountability stage by increasing the traceability should fraud occur using that identity.

What other steps can you take in your own operations to strengthen AAA across your workflows, both technical and operational? Requiring multi-factor authentication (MFA) is one control of many that greatly reduces risk around identity fraud and account takeover. Least-privilege, such as Role-Based Access Control (RBAC) or Attribute-Based Access Control (ABAC), or better yet, zero trust (the processes of verifying identity at every step of a process), can significantly reduce risk around inappropriate access to data or systems. Logging and alerting for sensitive events or exceptions, such as bank account modifications, payroll changes, load reassignments, or rerouting, significantly strengthen the accountability stage.

The transportation sector moves fast. Identity signals must be strong, shared, and auditable to keep up. AAA is not just a cybersecurity concept; it is a fraud prevention tool for the operations team as well. The SCAC Verified initiative is one tool to help raise the baseline so that one weak stage in the process doesn’t become an expensive incident.