Uncovering document fraud in maritime freight transport based on probabilistic classification

Abstract

Deficient visibility in global supply chains causes significant risks for the customs brokerage practices of freight forwarders. One of the risks that freight forwarders face is that shipping documentation might contain document fraud and is used to declare a shipment. Traditional risk controls are ineffective in this regard since the creation of shipping documentation is uncontrollable by freight forwarders. In this paper, we propose a data mining approach that freight forwarders can use to detect document fraud from supply chain data. More specifically, we learn models that predict the presence of goods on an import declaration based on other declared goods and the trajectory of the shipment. Decision rules are used to produce miscoding alerts and smuggling alerts. Experimental tests show that our approach outperforms the traditional audit strategy in which random declarations are selected for further investigation.