Transportation Business Resources

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Text: What the Truck? Headlines. Topical headlines appear in a list to the left of Malcolm Harris, who sits at a desk before a microphone and a MacBook. One topic, UPS, Teamsters Battle, highlights, as current news headlines scroll across the bottom edge.

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MALCOLM HARRIS: I'm going to shift paces right now and bring out -- again, representing Travelers, he is their Director of Inland Marine Claim at Travelers. Craig Leinauer, it is your hour. What's up, brother? How are you?

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Craig Leinauer, Director of Inland Marine Claim, Travelers, joins Malcolm in split screen. Logo: Travelers.

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CRAIG LEINAUER: Hey, I'm doing great. How are you doing?

MALCOLM HARRIS: I'm doing well. How was your weekend? And did Valentine's Day go OK?

CRAIG LEINAUER: Valentine's Day went great. I got to tell you, it was actually very romantic for a change.

MALCOLM HARRIS: Oh, that's awesome. I love to hear it, man. And I appreciate you for, again, being on the show. And I want to talk because you see cargo claims every single day. And when a loss happens, what's the first mistake you see with companies that end up complicating the claim?
 
CRAIG LEINAUER: Yeah, so by far, the most common issue we see is late notice, right. I mean, look, cargo claims are going to happen, and that's not a mistake. But the mistake is waiting too long to report them, you know. In some cases, companies don't report a loss until many weeks later when invoices are received or accounting shortages show up.

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The topic Complicating a Claim highlights.

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And the challenge with late notice, of course, is that it limits the ability to respond effectively, right. Evidence will become unavailable. Documentation, for example, can be incomplete. And then it gets really hard to determine what actually happened. So really from a claims perspective, it's important to report the claim as soon as you can, as soon as possible so that the investigation can get started promptly.

MALCOLM HARRIS: Sounds like some critical advice. And so once a claim is reported -- and we hope it's reported the right way -- what's another mistake that could cause some issues and problems?

CRAIG LEINAUER: Well, another one is, you know, report the loss immediately, even if all the details aren't known. Early notice is going to allow the adjuster to get involved right away to preserve evidence, document, conditions and then guide you on next steps.

So it also is going to help you, by the way, avoid potential issues with contractual or statutory deadlines. So, for example, if you have a shipment that's subject to COGSA or Carmack. There may be a claim filing deadline. It's going to help you keep ahead of that.

But the key is really to have a process in place and then training your people to recognize that when something goes wrong, it really needs to be reported right away. So let me give you a claim example.

So we recently had a $500,000 shipment of stolen baby formula. And in this case, the carrier reported it right away. And our adjuster was able to assign a theft investigator immediately
 
who worked with law enforcement and then recovered the entire shipment. So we actually ended up paying out $0. We saved half a million dollars. And that's not an insignificant amount of money.

MALCOLM HARRIS: No, it's not at all. And I want to ask a follow-up to that because what does good documentation actually look like in practice?

CRAIG LEINAUER: Yeah, so good documentation is going to be proactive and consistent. So you're going to want to photograph cargo, the condition at pickup and delivery, especially if something feels off. You're going to want to keep seal records. You're going to want to document exceptions right away.

And then you want to make sure that paperwork stays with the load, and then it's retained afterward. Good documentation doesn't just help you from a claim perspective. It's going to help protect your company's position overall on many, many levels.

MALCOLM HARRIS: It's phenomenal. Phenomenal advice, Craig. Now, another issue we hear about a lot is the confusion around cargo value. Now, how does this show up specifically when it comes to claims?

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Cargo Value Confusion.

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CRAIG LEINAUER: Yeah, sure. This is a really big one actually, not knowing the value of the load before it moves, right. So there's an important distinction between liability and insurance coverage. Insurance only pays up to your policy limits, but your liability can go way beyond that depending on what's in your contract or how much the cargo is actually worth what the valuation is.

So if you don't verify that shipment value up front and you confirm that they're within policy limits, what can happen is you can accidentally end up exposed to losses that exceed certainly
 
your insurance coverage. So this is a very common mistake that we see. Fortunately, it's easy to prevent if you're proactive.

MALCOLM HARRIS: That makes a lot of sense. Now, can you give us an example of how this value discrepancy, how it occurs, and to make sure that it doesn't? Because I know there's a lot on the line when it comes to this.

CRAIG LEINAUER: Yeah, so let me give you an example. So we recently had an insured who was hired as a motor carrier to pick up an industrial scissor lift. The trailer was hit by a train, and the cargo was destroyed, unfortunately.

The carrier's contract required it to have $100,000 in insurance. And it made them strictly liable for any damage. The problem was they never checked the value before they picked it up. It turns out that the scissor lift was worth $350,000. So they thought their liability was capped at
$100,000. But that was just their insurance coverage and not their actual liability limit.

MALCOLM HARRIS: Oof. So if I'm paying attention, we've heard that late notice of a loss or incomplete documentation and not knowing the value of a load are common mistakes that people often make when filing an insurance claim. But are there any other thoughts specifically when it comes to this?

CRAIG LEINAUER: Yeah, really two other big ones to mention. Failure to mitigate your loss, and then not understanding your contract. So, first, mitigation.

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How to Fix a Claim.

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You can't control when an accident happens. But what you can control often is how big the exposure gets, how big that loss becomes.
 
So what you want to do is you want to salvage what's not damaged. You want to get temperature-controlled storage lined up as fast as possible, if it's needed. And then you want to avoid any premature disposal.

So let's say, for example, you have a seven-pallet shipment of ice cream, and two of the pallets get damaged in an accident, but five of the pallets are still intact. Get the undamaged pallets to a freezer as soon as you can to salvage what you can.

And then, secondarily, contracts. Contracts can shift liability in ways that people just don't expect. A motor carrier can waive defenses contractually that they otherwise have under the law. And a freight broker can assume liability that they wouldn't otherwise typically have. So if contracts aren't reviewed carefully in advance of when the loss happens, coverage and exposure can quickly become misaligned. You really need to know what you're signing.

MALCOLM HARRIS: That is such good insight. Now, walk us through with this wrap-up. I mean, what are the fixes for common claim mistakes?

CRAIG LEINAUER: It's really just being proactive. You want to report your loss promptly. You want to document aggressively. You want to know the value of what you're moving before you pick it up. You want to mitigate whenever possible. And you want to understand your contracts before the loss happens.

Now, of course, these steps won't prevent every loss, Malcolm, but what they will do is they'll make a significant difference in how smoothly the claim is handled and also how much exposure you have.

MALCOLM HARRIS: One of the best in the industry, as always. Excellent stuff, Mr. Craig Leinauer. Craig, thank you so much for being here on the show, man. It's super insightful and always love having you on.

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Craig nods as Malcolm smiles.
 
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CRAIG LEINAUER: Thank you, Malcolm. It is truly my pleasure.

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Text: What the Truck? Headlines. Topical headlines appear in a list to the left of Malcolm Harris, who sits at a desk before a microphone and a Mac book. One topic, Ripple Effects and What Comes Next, highlights, as current news headlines scroll across the bottom edge.

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MALCOLM HARRIS: And transitioning from one M name to another M name -- Mark Borchert, again, is with Travelers. He's their Underwriting Officer of Inland Marine.

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Mark Borchert joins Malcolm in split screen. Logo: Travelers.

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Mark, thank you so much for being on the show. I hope you are safe and sound from the storm that we just talked about for a little bit. How's everything going?

MARK BORCHERT: Doing well, Malcolm, thanks for having me. Always happy to be here. Yeah, surprisingly, no snow in Minnesota, but very, very cold -- high of negative 10 today, so--

MALCOLM HARRIS: Oh my--

MARK BORCHERT: --we are bundled up.

MALCOLM HARRIS: Negative 10. Is that what you just told me?

MARK BORCHERT: I did say that. Yes, we're used to it. Don't worry.

MALCOLM HARRIS: Oh my gosh, I couldn't imagine. I'm sitting here wearing a jacket right now and I'm freezing. It feels like it's 8 degrees here in Chattanooga. But listen, we're going to get through it. And I'm going to put you in the hot seat before you go back into the cold. How does that sound?

MARK BORCHERT: It sounds great.

MALCOLM HARRIS: Awesome, awesome. Well, we'll keep it in, of course, with the FreightWaves tradition, we generally tap into you as well as your team to set up expectations for the year ahead. So let's just start with a quick reflection back on 2025. Is there anything that stood out to you in particular?

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Text: Looking Back at 2025.

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MARK BORCHERT: Yeah, we went into 2025 hoping that the cargo theft rates would finally level out. We had seen multiple, multiple years of historic increases, specifically around strategic theft. And to some extent, those theft rates did level out. CargoNet reports that -- they showed only a 1% increase in theft events in the third quarter compared to the prior year.

Now, that's just number of theft events. The bigger story is in that same time period, the average value per shipment that was stolen nearly doubled. So that kind of tells us that the criminals are becoming more sophisticated. They're more selective about what they steal and how they're doing it.

Another notable theme in regards to cargo theft was increased attention from regulators and law enforcement around fraud and cargo crime. However, those efforts are taking some time to show results. So that's an area we're continuing to monitor closely.

MALCOLM HARRIS: Turning the page now as we're in 2026, let's talk about freight fundamentals. What's going on right now in the market as we are currently now in almost the end of the first month of 2026?

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Freight Fundamentals.

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MARK BORCHERT: It's flying by.

MALCOLM HARRIS: Right?

MARK BORCHERT: High level -- yeah. One development that we've seen in the freight environment appears to be working through some of the supply-side imbalances that have built up over the last couple of years. After that large oversupply of motor carriers during the COVID boom, it appears that right now we're getting -- heading into '26, we're getting closer to, I would say, a healthy equilibrium in regards to the supply side of the freight marketplace.

And when we see that happen and that supply side does get closer to that kind of equilibrium, we saw spot rates and tender rejections make a nice rebound in December for the industry, which we're hoping are going to carry forward into the first and second quarters here. From our perspective, when we're looking at these things, that adjustment process is pretty important.

It tends to favor more consistent, sustainable freight market conditions over a longer period of time -- when we have that equilibrium. So we've also seen some continued focus on compliance and carrier qualification. You guys have probably talked about it here about the FMCSA upgrading their user registration system.

We like to see that -- when the administrators are paying closer attention to safety, documentation and that kind of operational integrity, that supports a healthier risk environment overall. So we're hoping that it shows results in reliable and stable motor carrier pool.

MALCOLM HARRIS: That's great stuff, Mark. And how are demands looking? What are the biggest demand-side risk you're watching as well as the rest of your team as we move into 2026 as well?

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Demand Side Risks.

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MARK BORCHERT: Yeah, that's a great question. Demand -- that remains a pretty close area of attention. There's

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Mark scratches his neck.

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a lot of broader economic factors that influence that freight demand for both end consumers as well as companies. And those factors are continuing to evolve as we head into the new year.

Uncertainty, I would say, is the key theme here. When we look at the consumer side, spending has been pretty resilient over the last year, even with external pressures. So it's really worth watching how that evolves into 2026. Use home purchases as an example. A new home purchase usually results in multiple truckloads of demand for improvement projects, shipments of new furniture, maybe some appliances.

Then a brand-new housing start, that would mean even more shipments for building materials and things of that nature. So trucking companies should be hoping for one, an improved housing market going into 2026, and for consumers to continue that resilient spending that we saw over the last year.

When we look at the commercial side, there's definitely still some uncertainty around manufacturing, import-export volumes. That's going to have a pretty large impact on demand. So whichever direction those head in 2026, that's going to be very tough to predict. A risk standpoint -- demand uncertainty, like we have in the marketplace right now, that can introduce some increased pressure across the supply chain.

So if those volumes shift unexpectedly, it can impact routing decisions, storage practices and warehousing levels, even security controls. So all of that's pretty important considerations from our point of view and from an insurance perspective when we're looking at cargo.

MALCOLM HARRIS: Makes a lot of sense, Mark. One more question as it pertains to 2026, what changes in regulation, fraud and security do you think will have the biggest impact on the industry? I know that's a really a broad question, but I know there's several factors that can contribute to this.

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Text: Regulation, Fraud and Security.

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MARK BORCHERT: Yeah, there's a couple of things that we're looking at going into '26. We continue to see focus across the industry on fraud prevention and carrier legitimacy. And we do a lot of work with that with our Special Investigations Group here at Travelers too. So registration processes, credential verification, compliance standards -- those things are front and center.

So notably, like I had mentioned earlier, that new FMCSA registration portal, that should hopefully help with some of those items. When we see increased scrutiny around who's allowed to operate and how that information is verified, it really influences how participants in the market approach that risk management. So that's what we like to see.

Those processes can also add some friction on the front end for carriers, but they're generally aimed at improving transparency and accountability. So that can result -- hopefully, we would hope, in increased confidence in the information that shippers and brokers are getting about the motor carriers that they're working with. So that should improve the experience for everyone overall.

A second item outside of the FMCSA registration would be, it's anyone's guess whether Congress will pass. There's currently proposed legislation that would address some of the concerns around fraud in the industry as well, including implementation of a federal task force. That would help with some of those cargo theft levels that we talked about earlier in the call too.

Those conversations tend to be important because that's going to shape the long-term operating environment. If we could get some legislation passed and a task force established and provide additional peace of mind for all of those in the trucking industry.

MALCOLM HARRIS: Mark, so looking ahead to the rest of 2026, if you had to put your finger on one thing that could really help trucking this year, what would it be?

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Looking Ahead.

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MARK BORCHERT: For me, it's all about predictability, Malcolm. Trucking supply, like I said, appears to be in a healthier spot than it has been in years. But it's still subject to market conditions. And then demand is going to be the main thing to watch for me in '26 -- is the key variable.

And really, it's anyone's guess as to which additional headwinds that the industry could face on that end. When these businesses have a clear sense of the operating environment, whether that's economic conditions or regulatory expectations or just general market dynamics that we talked about, they're going to be better positioned to plan, invest, manage risk.

So that broader uncertainty has an impact on the trucking space. These periods of uncertainty can challenge these companies. So any better clarity we can get and consistency that helps the industry operate more smoothly will be key heading into the rest of the year.

MALCOLM HARRIS: That's definitely an important perspective and also a good reminder of how closely trucking demand is tied to the broader economic policy. Kind of just highlights how much uncertainty is still in the system and what there is to be accomplished and done in 2026.

Mark, thanks so much for being on the show today, man. I really hope that we get you back on here soon, and I'll get you out of the hot seat and back into the cold up there in Minnesota, man.

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Malcolm smiles.

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MARK BORCHERT: Appreciate it, Malcolm. Always enjoy the conversation.

MALCOLM HARRIS: Likewise, likewise. Thanks again, Mark.

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