Fighting Freight Fraud with Dale Prax

[00:00:01] Dale Prax: There are 326-ish thousand carriers out there. Less than one-tenth of 1% have bad information within FMCSA’s database, like a telephone number 867-5309 or 1111. Now, if you look at the broker side, because they’ve never been vetted, 29.3% have bad information within FMCSA’s database.

[00:00:20] Todd Waldron: Hello, and welcome on location from the Mid-America Trucking Show, MATS. We are here today at the largest annual gathering in the trucking industry, where carriers, brokers, and industry leaders come together to connect, learn, and find real solutions.

We’re joined by Dale Prax, founder of FreightValidate and strategic fraud advisor at Truckstop. Dale is on the front lines fighting freight fraud, helping carriers, brokers, and shippers identify threats, improve the verification process, and protect their business.

With a background and leadership from the Marine Corps and a deep focus on integrity and accountability, Dale brings a practical, no-nonsense perspective to one of the fastest-growing risks in the industry.

Today, we’re gonna talk about freight fraud, protecting your authority, what’s really breaking down in the system, and how carriers can take control with better processes and awareness. Welcome, Dale. We’re glad to have you.

[00:01:14] Dale Prax: Man, I’m glad to be here. I love, love, you know, I love Truckstop. Yeah, so it’s glad to be here with you guys.

[00:01:19] John Howland: Alright. So question number one for you, sir. So I hear you’re a father of seven. You have grandchildren, you have a couple of businesses you’re running, you were in the military, everything else, and you have a very busy life. So I’m curious: Do you have any hobbies? What do you do in your spare time, if you have any?

[00:01:36] Dale Prax: I ride my motorcycle on the beach. I’m near the beach. Whenever I’m not doing this, or I’m spending time with my grandkids or my wife, I’m on a motorcycle somewhere.

John Howland: That’s great.

[00:01:45] Todd Waldron: So for listeners meeting you for the first time, how do you describe what you do in the trucking industry?

[00:01:51] Dale Prax: Well, I’ve been in this game for about, I’m going into my thirty-fourth year. I spent a Marine Corps career of about twenty years. The last six years were in the reserves, so I started as a freight forwarder, then I became a broker. It was funny when I was with an air freight company, they talked about moving freight by air, right?

So I said, “We should put this on a truck where you can make a lot more money,” right? And I’ll never forget, I was in Minneapolis, Minnesota, a young kid, you know, just came out of the military. I didn’t know anything really about trucking other than my dad was an owner-operator, but the air freight side.

And we had 4,000 pounds going from Minneapolis to Chicago, and they said to put it on American Airlines, which, it was actually Northwest Airlines at that time. And I said, “We could make so much more money. It’s a dollar a pound on Northwest Air. That’s $4,000 .”

So I got ahold of Freight Masters and moved that thing down there for $300. I’m going, “There’s profit in this thing!” The owner of the company at that time said, “That doesn’t make any sense. It’ll never happen. It’s the last time that’ll ever happen .” I started my first expedite trucking company two weeks later.

So fast-forward to today: I was planning on retiring three years ago. But there’s never been a vetting platform or a real push for vetting carriers, drivers, and brokers since 2001 or so when one company came up. There’s really been nothing. Yeah.

And as a broker, I developed my own platform called FreightValidate to validate carriers that we were using and to make sure that we could detect and prevent fraud.

And when I was going to retire from my brokerage, friends of mine said, “Why don’t you make that available to us? Because it obviously works for your company .” And so that’s kinda where I’m at now, transitioning to more of an advocacy role.

I’ve made some good friends at the Federal Motor Carrier Safety Administration. They’re listening to the industry for the first time in a long time, I think. We have some good leadership there; I think everybody will agree. It used to be just listening to the big trade organizations.

And while they’re important, we’re seeing more and more of Secretary Duffy and Administrator Bowers getting their information from Twitter. I mean, I talked to the Director of Registration today, and he told me that he gets emails almost daily from Secretary Duffy with screenshots off Twitter saying, “Check into this carrier,” which is kind of, that’s how things are supposed to be.

Todd Waldron: Yeah.

[00:03:40] John Howland: Was there any specific moment that you can recall off the top of your head that made you realize that fraud was actually a serious problem in the freight industry?

[00:03:49] Dale Prax: Not a specific reason, but it just all culminated over time, especially after COVID, because I think COVID was really the real start to it. People say that fraud has grown tremendously over the last five years. I think that telling people about fraud has increased tremendously.

It used to be that brokers were afraid to tell somebody that they were double-brokered or a load was stolen because, “They’ll lose their customer.

I don’t trust you. You must not have picked the right people .” So I think the problem’s been there, but it’s really been on more podcasts, and those kind of things have really evolved more. So the awareness has come out more.

But, again, fraud has increased a lot too, because what happened during and after COVID is we couldn’t hire anybody because we were on a government shutdown, right? So you had people sitting at home playing video games and, you know, watching Scooby-Doo for $60,000 a year.

John Howland: Mhmm.

Dale Prax: And we were hiring people from other countries, right, for very cheap labor. And so they started learning the craft really well. There are some brokers from Ukraine and Colombia that were maybe better brokers than I was because we trained them so well, and they’re such hard workers.

What happened, though, is we started bringing people back to work. Now those people started losing their jobs, but then they realized how easy it is to get an operating authority : $300 on a stolen Visa gift card, somebody give me a BOC-3, somebody give me a surety bond, and I’m in business.

Now I’m not making the $500 a month that that broker was giving me; I’m making $20,000 a month because I own this company now. The word got out. Now all of a sudden, we’re giving out 6,000 MC numbers a month to people that shouldn’t have them.

Todd Waldron: Yeah.

[00:05:10] Todd Waldron: So, how do integrity and accountability, common Marine Corps values, really inform or drive how you approach this issue and what’s happening in the industry?

[00:05:23] Dale Prax: Well, because we’re at war. These bad guys are the enemy to our trucking industry. They’re an enemy to our good truck drivers. It’s really sad that we hear all these stories about, “This bad truck driver did this, the bad truck driver did this .”

We don’t see any press about this great truck driver who was the first responder before the first responders got there. We never hear those stories, you know? And that’s because we’ve got so many of those enemies taking that away from them. They deserve that. We need to put that back on the front burner.

And as far as integrity, you know, I spent my last six years or so on the Inspector General team. I worked for a commanding general. My job was to go out and inspect things, find out problems, and fix them. And you had to be, you gotta be honest, and you had to.

Some of your friends in the Marine Corps, you had to say, “Dude, you’re going to jail,” or something. We had to point those things out, so I wasn’t afraid to do that to my friends. I’m surely not afraid to do it with somebody that’s ruining our community.

Todd Waldron: Yeah. Yeah. Absolutely.

[00:06:10] Todd Waldron: So is there a shift that happens when it comes to fraud or theft, or is this still largely falling on carriers to protect themselves?

[00:06:18] Dale Prax: That’s a great question, because a lot of times we’ve been saying that it’s the carrier’s fault. We’ve been blaming carriers for twenty-six years. Carriers are the most vetted of anybody.

Have you ever heard of a broker getting a new entrant audit? It doesn’t happen. There’s not a requirement for it. We don’t hear about roadside inspections; brokers don’t get any of that.

A broker could be in business, and I was a broker, so I’m not saying anything bad about brokers, but they can spend twenty years in this thing and never have been seen by anybody from the federal government. Nor do they get vetted by any vetting company, because owner-operators generally have enough things to pay for. They can’t afford another vetting company to vet the brokers.

And to prove that that’s right, when I first started FreightValidate, I went and started looking at US government details. There are 326-ish thousand carriers out there. Less than one-tenth of one percent have bad information within FMCSA’s database, like a telephone number 867-5309, right? Or 11111.

Now, if you look on the broker side, because they’ve never been vetted, twenty-nine.3% have bad information within FMCSA’s database.

John Howland: Wow. No idea. No idea.

Dale Prax: You know, there are 250 companies that have the email address [email protected]. That’s kind of weird, right?

[00:07:24] John Howland: Yeah. Wow. In terms of the fraud, where’s the biggest breakdown? Is it the people, the processes, or the technology? I mean, where is the breakdown really happening when it comes to the problem?

[00:07:33] Dale Prax: Everybody’s at fault. I mean, from the shipper who is not checking the credentials of the drivers coming in because they’ll say, “Well, you know, my son’s at a basketball game. I’m loading this truck anyway, no matter what the broker told them,” or not checking English language proficiency, or, you know, just drilling down on the shipper.

The driver has a responsibility too, you know, they have to ask questions. They’ve been drilled with questions for twenty-five years. Well, you have the ability and the responsibility to start asking questions yourself.

The first question I would ask if I was an owner-operator or a driver at a shipper is, “Who did you broker this load to ?” Because if it doesn’t match who the broker gave my load to, then we have a problem here.

This thing is being double-brokered. Ask them serious questions they should know: “What’s the pieces and weight?” without looking, and make sure your name is on the bill of lading. The drivers have a lot of responsibility and ability to do that.

And, of course, brokers have blame too, because they’re given the tools. We have plenty of tools for them to use, but sometimes they sidestep them because they’re in a hurry.

And the one thing I can say about the brokerage industry: They have the biggest gambling problem of anybody. They’re gonna go all-in on that load and hope it’ll happen, and if it doesn’t, “I lost the hand .” Yeah, they’re gonna go all-in.

John Howland: Yep. Absolutely.

[00:08:35] John Howland: I think I know what your answer is gonna be here, but what is really the most common way that carriers are maybe getting caught with fraud?

[00:08:43] Dale Prax: One of the most common lately is the buying and selling of MC numbers. That’s become a big issue. We at Truckstop, back in November, sent in proposed rulemaking to really clarify and prohibit the buying and selling of MC numbers.

Well, the agency listened to that rulemaking we sent it in in November. And last Friday, on Friday the 13th, we saw a big bulletin that came out. The Federal Motor Carrier Safety Administration says, “Do not sell your authority .”

That’s where the industry and the agency need to work together, and we’re starting to see that happen with this administration. They’re listening to Truckstop, and we’re listening to the DOT. Yeah.

[00:09:16] Todd Waldron: So, if we drill down and get practical on the things that really hit home for drivers, so, you said drivers don’t ask enough questions at the dock. What kinds of questions should they be asking before they start any other process?

[00:09:28] Dale Prax: They should ask for the information on the bill of lading. The shipper should be able to know everything about that load. If something doesn’t match it, or if your rate confirmation from your dispatcher says this is going to a place in Idaho and your bill of lading shows it’s going to a warehouse in California, there’s something wrong.

Ask them why that’s happening. Don’t just take a load from somebody because they’re offering you a great rate. You should check Truckstop, and there’s plenty of places to look, for what this load should be paying.

If somebody’s offering me $6,000 to go from Miami to Atlanta, you know, a truck driver might say, “Wow, new tires!” Well, the reality is: no paycheck, because you’re not going to get paid.

Todd Waldron: Yep. Absolutely.

[00:10:00] Todd Waldron: So what happens if someone at the dock or the specific person you’re talking to can’t answer the questions for you? Then what do you do?

[00:10:05] Dale Prax: Red flag. You call the broker. You call your dispatcher. You call the ownership in your company, the safety folks there, and say, “Hey, I’ve run into a red flag here.

I need you to investigate this thing, because I’m telling you now, I’m telling you there’s a problem .” So you have to depend on the people that put you behind that wheel to back you up, and they better back you up.

Todd Waldron: Yeah. Absolutely.

[00:10:22] John Howland: Yeah. From a little bit of the broker’s lens here: Is there anything a broker could or should be doing that would help the process and make things easier for carriers to ensure that, yes, what I’m hauling is actually legit?

[00:10:35] Dale Prax: I think the biggest thing a broker can do is have the same relationship with the carrier as they do with their customer, because a carrier is your customer. You treat them like that. Everything you have in that load is on them.

We’ve gotta get rid of the days where we fight about paying a carrier or a driver detention time, or allowing them to use a restroom. These are people that are the backbone of everything you do. I mean, we can’t have a world where there’s a broker without a motor carrier. There’s just no such thing.

So I think the biggest thing we can do is start treating people like people, treat them like customers. The driver’s the backbone, and, you know, I’m tired of people using that as a cliché and writing it on their website, but then they won’t pay them detention. They’re not the backbone if you treat them like that.

John Howland: Yep. I love that. Agreed.

[00:11:15] John Howland: Do you think it’s time for the lightning round? I’ll shoot the first lightning round question, then I’ll pass it over.

[00:11:20] Dale Prax: Go for it.

[00:11:21] John Howland: Alright. This is my go-to question, and I hope you haven’t listened to any other podcasts because I don’t want you prepped for this. Alright. If an animal was to jump behind the wheel of one of these big trucks and start driving around, what animal do you think would be the best driver?

[00:11:36] Dale Prax: It would have to be a pretty big cab, because I’m gonna say an elephant. And why do I say that? Because an elephant has the best memory, right? Let’s remember to do your pre-trip in the morning. Let’s remember to look at the bill of lading. Let’s remember to vet the guy. Let’s remember that this is a truck. Let’s remember to watch out and get out and look. Let’s remember to use your mirrors. An elephant will do that. So that’s why I say that.

John Howland: Love it.

[00:11:57] Todd Waldron: Great answer. Great answer. The freight industry would look meaningfully better if or when what?

[00:12:04] Dale Prax: Two things : If the FMCSA enforces all the regulations on the books right now, don’t need to make a bunch of new ones. Enforce the ones that are there; we’ll be way better off. The second thing is, I’ve been preaching this now for about three years , I think the FMCSA’s middle name is Safety. Let them be in charge of safety.

The Transportation Security Administration is security. That’s who should issue operating authorities. You should have a Transportation Worker Identification Credential (TWIC) as a prerequisite for getting your operating authority.

That way, you’re in person, you’re putting your fingerprints down, you’re doing a background check. You’re not gonna be in Pakistan saying you’re in Pittsburgh. And so, that’s who should get the authority.

Todd Waldron: Yeah.

[00:12:38] Todd Waldron: What’s one red flag drivers should never ignore, even if it costs them the load?

[00:12:44] Dale Prax: “You’re getting this load from my sister company .” If somebody’s trying to give you a load from somebody else that’s not them, or telling you to divert to a warehouse, it’s not worth it.

Or offering way too much money, I see a bunch of them offer too much money. But I say, anytime that guy’s not truthful to you, don’t give him a second chance.

John Howland: Yep.

[00:12:59] John Howland: Alright, last one: Who is someone in the trucking industry that, if you had to take advice from, listen to, your go-to person for advice in this industry, who would that person be? Somebody out there doing good things.

[00:13:11] Dale Prax: I would say, and I don’t wanna talk specifics , if it was fraud, it’d be one person; if it was something else, it’d be somebody else. But all-around, if I were an owner-operator, somebody I want to listen to today and follow today, it would be Adam Wingfield.

Adam Wingfield is one of the smartest guys that I’ve met as far as teaching a driver that, “Hey, just because you own a truck doesn’t mean you’re a businessman .” And so, if you listen to a guy like Adam Wingfield, you’re gonna get that loud and clear. And he’s very good about it.

[00:13:36] John Howland: I thought it was gonna be Todd and I, but…

[00:13:38] Dale Prax: I just couldn’t do that. It’s that integrity part.

[00:13:42] Todd Waldron: Can I have my check back? Twice now Adam has been mentioned, and we’re actually having him on the podcast tomorrow.

[00:13:49] Dale Prax: Who’s your best podcast guest? Yeah, that’ll be you guys. So, yeah.

[00:13:54] Todd Waldron: Dale, it has been an absolute honor to get to know you, to work with you , to spend time with you, to learn,

[00:13:59] Todd Waldron: , from you. The amount of knowledge that I’ve gained in just knowing you for the months we have, it’s been an honor. It has been great to have you on the show today. Thank you for being here, and we wish you the best of luck.

[00:14:09] Dale Prax: Yeah, thank you guys. Again, I love Truckstop.

Todd Waldron: Absolutely.

[00:14:13] Todd Waldron: If today’s episode helped you think differently about your operation, share it with someone in your network who needs to hear it.

[00:14:19] John Howland: And if you’re looking for tools to help keep your truck rolling, from finding quality loads to getting paid quicker, well, Truckstop.com is here to help.

[00:14:27] Todd Waldron: Go visit Truckstop.com to explore the load board, rate insights, and risk management solutions built specifically for carriers and brokers.

[00:14:35] John Howland: Thanks for listening to us at Behind the Freight.

[00:14:39] Todd Waldron: Until next time, keep the wheels turning and the bad loads burning.