Freight's Real Problem Is Enforcement, Not Data, Highway Exec Says

A $600 million nuclear verdict against a broker hangs over the freight industry's fraud debate, and Michael Caney, Chief Customer Officer at carrier-identity platform Highway, used it as the price tag for what he calls the industry's real disease: not fraud itself, but the absence of enforceable standards. Speaking at the FreightWaves Broker Compliance Symposium, Caney said freight has more tracking, more data and more fraud awareness than at any point in its history — and losses keep climbing anyway.

His reframe was blunt. No industry has ever eradicated fraud, he said, pointing to healthcare, where the fraud market keeps growing despite decades of countermeasures. People have not switched off their credit monitoring, he noted, because the threat never disappears. Fraud, in his telling, is a signal that tells you where to look, and freight has spent its energy swatting the symptom rather than treating the condition underneath.

What makes freight fertile ground?

Fraud needs three ingredients to work, Caney said: the prospect of gain, anonymity and urgency. Freight hands criminals an abundance of the last two. A broker pressured to cover a load before a shipper's clock runs out is a broker tempted to relax a standard, and a bad actor who stays anonymous long enough to exploit that moment can steal freight, endanger the motoring public and move on.

Brokers sit at the dead center of this dynamic, which Caney framed as either a curse or an opportunity. The roughly $600 million broker verdict served as his reminder of how expensive the curse version gets.

Is the problem really a lack of data?

No, according to Caney — and here he made his sharpest point. Everyone in the room has standards. What the industry lacks are standards that are shared, arbitrated and, above all, enforceable, with consequences attached to ignoring them. He named three groups that feed brokers enormous amounts of data while carrying very little accountability:

• Insurance agents, whose policy data brokers rely on for vetting decisions
• Telematics providers, whose tracking feeds compliance scorecards
• Factoring companies, which collect receivables off the freight transaction

All three, he said, were nowhere to be found at a compliance symposium. When an insurance agent submits bad data, misses a cancellation or lets a scheduled item lapse, the broker making the hiring decision on that data is the one left exposed.

The insurance numbers alone were striking. Of roughly 10,000 agents feeding the system, Caney said about 40 cover nearly half the vehicles, while 200 cover only 3 percent. Thousands of small sources push data with almost no continuity, timeliness or accuracy. Having that much data, he said, is not the same as being able to enforce anything with it.

Why years of tracking haven't stopped the losses

Caney walked the audience back to the era before universal load tracking, when shippers began selling the little blue dot for a dollar a load with the promise that all problems would vanish, then pushed the cost onto brokers when carriers balked. Years later, the industry tracks almost everything, spends heavily to do it, and still watches fraud rise.

The spending without accountability is its own tell, he argued. When brokers audit their technology bills, the tracking line is enormous — built on volume, on pings and searches rather than outcomes — yet those same brokers balk at a $500 fee tied to a guaranteed load. His arithmetic was blunt: $500 is cheaper than $600 million.

What about the gap between reported and real performance?

Carriers routinely hand over tracking records showing 90 percent compliance, Caney said. When Highway runs those records through its own verification, the true figure often lands closer to 75 percent, exposing chameleon carriers and operators gaming the scorecard. For years, meeting a customer's scorecard on paper was enough to keep freight flowing, with no consequence for the vendor that oversold the tracking or the carrier that faked it.

What has changed, in his framing, is that the industry finally has a stick. Highway will de-certify a telematics provider whose network is riddled with carriers that steal, drop a carrier, or refuse insurance certificates from an agent whose data cannot be trusted.

Has risk shifted from rules to process?

Caney's forward-looking argument was that industry risk has moved from rules to processes. Brokers spent years accumulating rules — one oddly specific exception at a time — until configuring a new rule went from a six-month statement of work to a thirty-minute task. The result: brokers hold more rules than ever and override a huge share of them, so many that the rules are no longer really their own.

The future, he said, is not more data or more layered rules, but simpler decisions baked into the workflow, powered by network effects rather than tribal knowledge in one person's head. A load is becoming less like a truck going from A to B and more like a fully digital financial transaction, with many parties determining whether it conforms. Good vetting should confirm a carrier actually holds the insurance to haul a specific load — catching buried policy exceptions, uncovered commodities, liability limits that fall short — and tracking should initiate automatically rather than depending on a driver accepting an app.

A 'Buttonwood moment' for freight?

Caney said Highway has guaranteed well over a billion dollars in freight and rarely paid out, with exceptions tracing back to someone gaming a certification. But his closing call was collective. Of his 1,500 customers, only 243 have enrolled in the stricter Performance Team standard, which costs nothing but requires following the rules. Those 243 have moved a million loads with, in his words, total peace of mind — leaving the question of where the other 1,300 were.

He cited Dee Hock, founder of Visa, and his warning that an industry that will not govern itself from within will be governed from without. He invoked the Buttonwood Agreement of May 1792, when a couple dozen brokers under a tree on Wall Street agreed on the standards that seeded the New York Stock Exchange. Standards, Caney said, never emerge from a vendor's funding round — they emerge when participants decide what is acceptable and attach consequences to the difference.

The companies that emerge from the fraud crisis strongest, he predicted, will be the ones that stop waiting and start setting requirements for every party in the transaction, from insurance agents to telematics providers to factoring companies — before outside regulators set the rules for them.

This article is based on a keynote by Michael Caney at the FreightWaves Broker Compliance Symposium. Figures and claims are as presented by the speaker.