The Physical Economy: A Field Guide › Chapter 7
You cannot operate in freight without respecting its cycle, because the cycle changes what every party wants from software.
The pandemic whipsaw. 2020–2022 was the greatest bull market in trucking history: consumers bought goods instead of services, rates went vertical, and anyone with a truck printed money. Capacity flooded in — tens of thousands of new small carriers, many financed at the top. Then demand normalized, and 2022–2025 became the longest freight recession in memory: spot rates below operating cost, brokers' margins crushed, and a slow-motion capacity liquidation. Convoy — a digital brokerage that raised over a billion dollars — shut down in 2023, a cautionary tale we take seriously about burning venture capital to subsidize freight transactions.
Where we are now (mid-2026). The cycle is turning, supply-side first. Spot rates reached roughly $2.96/mile in March 2026, up ~27% year over year, while volumes stayed soft — meaning the recovery is driven by carriers exiting (an estimated 5,000–8,000 in 2025, with exits accelerating), not demand booming. For our business the implications are concrete: tightening capacity makes carriers choosier about which facilities they serve (dock experience becomes a rate factor), shippers are entering a re-negotiation cycle (doors open), and everyone's tolerance for waste and fraud drops.
The fraud epidemic. Reported cargo theft hit roughly $725 million in 2025, up ~60% — and the growth is not in crowbars. It's strategic theft: criminal groups impersonating legitimate carriers with spoofed emails, cloned MC numbers, AI-assisted call centers, and forged documents; accepting loads through normal channels; and disappearing with the freight. Double-brokering scams siphon nine figures more. The industry's response has made carrier identity a boardroom topic — Highway built a large brokerage-side vetting network on exactly this fear. But note what's missing: brokers vet carriers at booking. Almost nobody verifies the human at the gate — whether the driver physically standing at the dock matches the carrier who accepted the load. The last, most physical link of the fraud chain is checked by a clipboard. That gap is exactly where a dock-layer platform belongs.
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