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 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.

Copyright 2026 The Travelers Indemnity Company. All rights reserved.

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Text: What the Truck? Descartes Macro Point. A list of topics appear to the left of Malcolm. The lowest topic, Supply Chain Layoffs, is highlighted. Headlines scroll across the bottom of the video.

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MALCOLM: I know we have a jam-packed show, so I don't want to delay any further. Joining me again is someone who is new to the show, DZ Patterson, who leads a team, rather, specializing in cargo theft losses, and Travelers' Investigative Services Division, a warm FreightWaves What the Truck? welcome to you, DZ. How are you, sir?

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DZ Patterson appears to Malcolm's right in a split screen.

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DZ PATTERSON: Great, Malcolm. Thanks for having me on today. I'm looking forward to this.

MALCOLM: I'm looking forward to you being here. And thank you so much and the entire team at Travelers for taking some time to be here. We've got a special segment for you all today. It's becoming an annual What the Truck? tradition to wrap up the year with a look back at the trends to see how they played out. So for a good portion of this year, we've been talking about cargo theft and how it's becoming the new normal. What are your thoughts specifically on this, DZ?

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Cargo Theft in 2025 highlights. Text: DZ Patterson, Director, Travelers Investigative Services.

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DZ PATTERSON: Well, unfortunately what you said is pretty accurate. If you're a glass-half-full person, then you're looking at things going, hey, the numbers have plateaued. If you're a glass- half-empty person, you're going, yeah, the numbers have plateaued, but it's a brand-new normal, and it's a high normal. We're looking at all the stats that are bearing these things out.

The international theft rings are the ones that seemingly are keeping these numbers high. And going into 2026, we want to look forward to cultivating a culture of hardening your supply chain and the various ways to do that. If we don't do that in the supply chain industry, then business as usual with cargo theft.

MALCOLM: Now, DZ, can you please, for our listeners, explain what you mean by harden the supply chain?

DZ PATTERSON: Yeah, there's some gaps in the supply chain that we see that the thieves are exploiting. And we want to get the folks to teach, and train to this, and live this as a full team sport, everybody up and down the line cooperating together, taking the train and learning the tips, the tricks and whatnot, and really just trying to be on defense all the time.

MALCOLM: So I'm guessing that means that right now, the supply chain may not be working so well. And where's the weakest link you would say, DZ?

DZ PATTERSON: What we see is the weakest link, based on the thefts that we investigate, is the point of shipment. Strategic theft particularly, that's where it takes off at a lot of times. Right. So you need a better culture of security along all those lines. Brokers have to be communicating with the shippers, the manufacturers, the carriers. Everybody's got to be dialed in at that point of shipment or they're going to continue to be exploited by the bad guys. So again, supply chain security needs to be a mindset of everybody up and down that whole chain. Anybody that touches any piece of cargo needs to have that security mindset.

MALCOLM: I know.

DZ PATTERSON: It sounds like common sense to most of us. But what I'm going to say is, once you develop these points to keep the supply chain safe, for goodness' sake, don't put them on
 
LinkedIn. The bad guys are good at going out and getting all this information that they can to find out what particular entities are doing. And they're going to exploit those if you put your solutions out there on LinkedIn or any other open-source document.

MALCOLM: Thieves are, in fact, no dummies. I mean, you tell them what you're trying to do on these platforms, to your point, they'll just find a workaround. Now, my next question, any advice on how to prevent this breakdown from happening in the first place?

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Reefer breakdown is highlighted.

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DZ PATTERSON: Yeah, most of it boils down to, seemingly, just communication. Everybody has got to be talking to each other again. There's some manufacturers out there that are very easy targets right now. And you think about it -- I'll mention dog food, for instance. It's easy to sell. And you wouldn't suspect maybe dog food as being a targeted commodity. But because of what I just said, it's very easy to move.

So we've got to have folks at the point of shipment saying, hey, is ABC Trucking showing up here to pick up this load? Yes, they are. And if anyone else, if any other carrier shows up, no matter what they say, if they're not ABC Trucking, that load is not let go from the point of shipment. And if there's any sort of doubt there, make some phone calls. Verify the information that you got. Just verify who's coming to pick up your stuff at the point of shipment.

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DZ shrugs.

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MALCOLM: Now, I want to ask specifically because besides being a colossal monetary loss, strategic theft can also hurt a brand severely in the long run, right?

DZ PATTERSON: Absolutely. If you think about it, and your brand gets picked up, and it gets back into the supply chain through some discounted means, what happens when that piece
 
goes bad or there's an issue with it? And you think about the sale price of it. The unauthorized folks that are out there selling these things, it's going to damage the brand. It's going to damage relationships between the shippers, the carriers, the brokers. Just that communication piece is a big thing to knock that down to not even an acceptable degree, but just knock it down to zero.

MALCOLM: Let's talk about the reefer breakdown, another scam that we've been hearing about this year. It's been called one of the most clever delay scams in trucking. Can you unpack this for us, DZ?

DZ PATTERSON: Yeah, so it's a very common tactic these days. And you think about how it's done. Shipment is going from point A to point B. The carrier calls in and says, oh, my reefer broke down. They even may go out and get a receipt and buy a part that they said is broken down. That's buying them time. There's time involved in repairing that. There's time getting the part.

If the breakdown has not really happened, then they're miles and miles down the road, while you, as a shipper, may think that they're actually stuck in some location getting that repair done. These guys will even go as far as to take a picture of the receipt, send it in. It looks legit, but we know that it's not. And it cost a lot less money to buy that part for the reefer than what's going to be made on that stolen load of cargo.

MALCOLM: By the time, I mean, of course, this is all figured out the breakdown was a fake, I mean, they're long gone. This buys them enough time to get away with it. This is nuts.

DZ PATTERSON: Absolutely, absolutely.

MALCOLM: So what should shippers, carriers and brokers be doing to counter GPS spoofing specifically?

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GPS Spoofing is highlighted.
 
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DZ PATTERSON: Yeah, GPS spoofing is something we've seen come in vogue as well over the last term. And we're suggesting to these folks, hey, along the route, geofence some spots. The travel time is from point A to point B. Geofence that location. If that location is bypassed, or if they get there in a much quicker fashion than you expected, something may be wrong. There are also other ways to track these things.

And we don't recommend just putting in a single device into the load. Use something else. Get some redundant tracking. Even so far as to say, go with another manufacturer so that you can track these things independently. That independent beacon inside the trailer is going to go a long way to helping you find out where your load is. We think you need to layer your tracking tools. OK, and I know that some folks are content and happy on what they're doing now, but we just want to suggest that one little small step that hopefully will keep the cargo safe and get to its intended destination.

MALCOLM: That's great stuff, DZ. I mean, so as 2020 winds down, we're reminded that we obviously need to still be on alert for strategic theft and an ongoing trend. I imagine that we'll be talking about it heavily as we head into 2026. I want you to be well, man. Be safe. Happy holidays. And you definitely need to make a stop back on What the Truck? in 2026. How do you feel about that?

DZ PATTERSON: Oh, I absolutely would love to do it. And I wish you the same on the holiday stuff. Everybody stay well and stay safe.

MALCOLM: Thank you again. DZ Patterson, director of Travelers' Investigative Services. DZ, thank you again, brother.