fraud prevention using webxpress tms

Solution Features and Suggested Processes

Fraud Management @

WebXpress

Background

Indian Logistics sector is worth USD 100 bn

Road Transportation alone accounts for more than 50% of logistics spend

Over 50% to 70% payments for transportation movement is in CASH

TRANSACTIONS- that is approximate USD 20-28 bn or Rs. 100,000 Cr to

Rs. 150,000 Cr. In CASH

As per Transparency International, over 22000 Cr. of bribes are paid by

transporters on Indian highways every year

Thus, the sectors is highly prone to frauds and leakages

This presentation outline some of the methods used by employees/

vendors/ customers to defraud transportation companies

The presentation also discusses role of WebXpress Solution to prevent

some of the frauds and put in place processes to ensure accountability of

transactions

WebXpress does not claim to solve the gargantuan problem of corruption in

the sector- but can help its customer protect themselves to best possible

extent

Transportation- riven with corruption

20% of working time spent in paying bribes

Fraud Examples- Never told, never heard

It could happen to you !!

• A leading courier company recently found that over Rs. 70 lakh worth of To

Pay and Paid cash was never submitted to company and was pocketed by

employees

• An express cargo company found that a bets performing region was actually

making ghost booking and deploying ghost vehicles with real money taken

from HQ

• A fleet company found that their vehicles in return journey were showing

very low yield but were actually full of goods of outsiders

• A parcel company in India’s hinterland found that employees were collecting

more amount than reported and were reporting gap as customer deduction

• Many such examples are bound and India is not alone in such cases. Here

is a report from PWC showcasing global fraud in Transportation Industry:

How WebXpress Prevent Fraud?

How WebXpress prevents fraud

Fraud Description How WebXpress helps

Under reporting of

load

Booking clerk will report

weight as 400 Kg when it is

actually 600 Kg. 200 Kg.

moves free at company

expense and booking clerk

gets a tip from customer

• Random check of arrived consignments for

weight and volume

• Report DEPS in case of gap and system will

raise a TICKET

• Analysis of tickets will help to find branches

with maximum issues

Market vehicle in

place of own

vehicle

Branch places market vehicle

even when own vehicle is

available. Branch gets a cut

from market vendor.

• GPS on own vehicles will show where they

were at the time of placement

• Job sheet will show whether vehicles were

actually under maintenance

Market rate higher

than actual

Branch places vehicle at rate

higher than available in market

and pockets the difference

• Use WebXpress TAM module to approve every

placement

• TAM will show past tend of rates for same lane

• Also, random calls to market brokers will

provide real rate



Extra placement Branch places more vehicles

than required stating more

stock or urgent service request.

• Monitor vehicle load factor and raise alert for low

load factor

• Work out schedule of vehicle placement and

block a schedule once used

Ghost vehicles No vehicle is places and dummy

documents are created

• Insist on system generated Challans.

• They require system entry of LR and LR requires

real load.

• Do not allow same vehicle number once used till

the time it is freed at another location

Multiple payments

for same vehicle

Vendor submit same challans

multiple times over time and

get payments

• Vendor bill is booked in system before payment

• WebXpress never allows same challan to be

booked more than once- EVER



Request for more

cash than needed

Branch asks for cash for expense

on advance, conveyance, office

expense etc. even when they have

cash in hand

• WebXpress provides ONLINE view of CBS of

each branch and also of collection

outstanding

• Branches will get advance based only on

online balance. If branch has not updated

system, more cash will show

Late collection or

non reporting of

paid and to pay

Branch does not collect payments

in time. Or it actually collects but

does not report.

• Paid and To Pay outstanding reports will help

HO focus on collections

• Daily SMS alert can be sent to branches for

collection of outstanding

Wrong reporting of

deductions for

cash collection

Branch collects Rs. 3000 but

reports only Rs. 2500 were

collected and show gap as

deduction

• Send SMS/ e-mail to customer stating

collection and deduction amount

• Also send help line number if he feels wrong

data is sent

• This will ensure HO will know wrong

deduction as customer will not accept wrong

data

How WebXpress Prevents leakages?

Leakages

• Not all loss is dues to frauds, a much larger amount of

loss is due to leakages and inefficiency of operations

• WebXpress can be used to build practices that will

prevent or reduce many of these leakages

• Needless to say that organizational practices need to be

aligned with WebXpress system for best results

Prevention of Leakages

Leakage Description How WebXpress helps

Late billing LR remains unbilled for a long

time due to various reasons-

POD non arrival, comments by

customers, large volume etc.

• WebXpress can be used to scan POD and start

audit as soon as delivery is completed

• PODs that are audited can be parked as

APPROVED FOR BILLING

• Thus, bill can be expedited quickly and bills

submitted once PODs arrive

Late submission Bills are sent to branch but not

submitted to customer in time

• WebXpress can be used to note submission

details. It can then be used to track

unsubmitted bills

• Also, bill acknowledgements can be forwarded

with a scanned copy

• Electronic bills can be submitted to customers

where acceptable

Bill rejection Bills are rejected by customer

due to wrong contract details,

wrong rates. Many a times

contract is revised but bill is

made with old rates

• All contracts can be entered in system and LR

can get rates automatically. If contract is

expired, LR can not be made

• This will ensure that bills are correct and

rejection is minimized


Leakage Description How WebXpress helps

Recovery of

deduction s

Customer provides details of

deduction quite late. If the

same is not investigated, it

can happen that wrong

deductions are made

• WebXpress recovery module tracks every

deduction against every LR

• This also helps customer work with customer

and recover amounts where possible

• This can be recorded against the LRs

• Also deduction by customer can be recovered

from vendors or employees

Rate enforcement Users enter the rate as they

see fit to get business from

customer. This results in loss

to company

• Standard contracts, yield limits, minimum

charges, weight etc. can be entered in

WebXpress system

• LR entry can then be done only in accordance

with contracts or standard rates. This will

ensure minimum business for company at no

loss

Last mile cost

control

Delivery to customer premises

from hub is last mile delivery.

Many a times delivery cost per

Kg is much higher

• WebXpress can be used to focus on pick up

and delivery cost per Kg.

• This will help to ensure that there is no excess

payment in last mile



Vehicle

Underutilization

Branch/ Hub places vehicle with less

than optimum load due to

“operational reasons”

• A rule can be set that any vehicle

must be utilized to say at least 70%

of capacity, else approval needs to be

granted

• Cost per KGKM rule- the cost and load

in vehicle should be such that it meets

cost per KGKM criteria protecting

margins

Underutilized

route segments

In a multi-point route, a particular

segment is run less than optimum

• WebXpress route analysis can help to

monitor trend in segment wise usage

of a route

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fraud prevention using webxpress tms

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