A recent Supreme Court ruling in Montgomery vs Caribe Transport the court ruled unanimously that truck,freight brokers could be sued in state courts if a negligent driver or carrier were used. The court ruling implied that brokers who did due diligent safety processes would a good defense if sued. In the real world what does this case really mean? When a court ruling is made against some interests of your organization, there many times it is viewed in a world is coming to end response. I do not think this feeling is justified in this court case
This essay will be split up between talking about large brokers and large volume shippers versus the small broker and the low volume shippers. High volume large brokers and shippers will see very few change, but that will not be true for small shippers and small volume brokers.
My opinion on large volume shipper and broker has a background of my nearly 50 years work history in this industry. I define a large volume shipper defined as paying more than a million dollars a year in supply chain costs heavily weighted to domestic US trucking.
Big volume shippers and brokers have end users that require consistent service. They have avoided carriers with safety risks. While in the past, the freight broker did not have liability for trucking incidents. and the shipper sure did. I know at times I directed brokers not to use a certain carrier or even certain driver if thy handled end customers rudely poor service or if I had any safety concerns There is an underlying assumption that poor customer relations drives were likely as to be drivers who do not pay much attention to safety. In short, actions taken currently will not cause change the freight broker operations.
One change I do foresee is improved safety communication. United States Department of Transportation has details on all carrier’s accident statistics, and many carriers have safety ratings, though there are many carriers have never had a safety rating attached. The information is there but it is time consuming to find and you just do not have work time to look at this. I believe shippers rather than spending their time and money do develop their own systems to get this data will expect 3PL’s and 4PL’s, in other words their brokers and supply chain managers. With AI to go through all that data, one can establish a safety data base. I suspect Shippers will ask for reports on the safety status of carriers used, maybe on a quarterly basis. AI will be useful in setting that up. This is the major procedural change I see coming.
In my career I met a lot of freight brokers, who got there start by using their then dial phone to call and find truckers. Some of them did not even bother to deal with the government requirements for broker authority. Those days are gone because the liability aspect will significantly increase insurance costs. Even low volume shippers will be wary of using smaller brokers due to their lack of capability to get safety data, that bigger freight brokers will automate.
There are a significant number of small operations, both shippers and brokers. Low and medium volume shippers will now need to deal with bigger freight brokers who have the resources to meet safety obligations. This made lead to some consolidation in the freight broker industry.
To sum my essay up, there are two general thoughts One big volume shippers and freight brokers will see little change due to this court decision, other tan some procedure changes to improve safety information availability and transparency. Smaller freight brokers and low and medium shippers will likely see more change. Smaller freight brokers will have difficulty with obtained safety information. This could lead to much higher liability costs which may put them out of business. Smaller and low volume shippers may be forced to move to larger volume freight brokers due the loss of smaller freight brokers.
