Top Brokers Envision Safer Industry After Montgomery Ruling

“This ruling doesn’t fundamentally change how we operate,” Fuel Transport's Blackwell said. (grandriver/Getty Images)

As the dust has begun to settle from the U.S. Supreme Court’s recent Montgomery v. Caribe Transport II ruling, several prominent freight brokerages have said the decision, while increasing legal exposure, will also reinforce industry safety practices.

The high court ruled unanimously in May that federal law doesn’t protect freight brokers from state-level negligent-hiring lawsuits. The decision clarified that the Federal Aviation Administration Authorization Act doesn’t preempt such lawsuits, since the law includes a safety carve-out even as it restricts states from regulating certain broker activities.

“This ruling doesn’t fundamentally change how we operate,” said Ray Blackwell, general manager of sales and operations in the U.S. at the logistics company Fuel Transport. “Compliance, safety and carrier accountability have been embedded in our business from the beginning, shaped by decades of experience in fleet operations and driver recruitment.”

Blackwell added that this foundation informs a proactive approach to carrier management, including vetting, insurance verification, safety reviews and ongoing compliance monitoring. He views the ruling as largely reinforcing these efforts.

He also stressed that brokers should be thinking beyond minimum regulatory requirements, and that compliance should be incorporated into day-to-day operations rather than viewed as a separate function.

In the days following the decision, Landstar System issued a statement reflecting on the ruling and its ramifications for the industry.

“Safety is fundamental to how Landstar operates,” said Frank Lonegro, president of the independent agent-based broker. “This decision reinforces the importance of how we operate and is consistent with the standards that make Landstar the leading platform for independent agents, [business capacity owners], and third-party carriers.”

Lonegro noted that his company has already been applying disciplined processes to evaluate, qualify and arrange transportation for years. He also pointed out that the decision may increase focus on carrier selection practices and elevate expectations more broadly.

Landstar ranks No. 25 on the Transport Topics Top 100 list of the largest logistics companies in North America and No. 11 on the TT Top 100 list of the largest for-hire carriers.

Other major 3PLs also have weighed in on the Supreme Court decision.

“RXO does not expect this ruling to have a negative material impact on our business,” a company spokesperson said. “In fact, it underscores the importance of choosing a brokerage partner with rigorous carrier vetting processes and financial stability. We believe this ruling will accelerate industry consolidation, reinforcing the long-term competitive advantage of scaled players.”

RXO ranks No. 11 on the logistics TT100 list.

“The market has had a lot of activity around what does this mean for the supply side and the number of carriers,” said Dave Kiesling, group vice president at the third-party logistics and supply chain management company Kenco. “There’s a lot that needs to be played out as these individual cases, that will now be decided at the state level, get resolved.”

Kiesling noted the ruling raised the question of what it means to properly vet a motor carrier for both brokers and shippers. He expects heightened scrutiny in the short term as brokers reexamine their current carrier bases. He also suspects this has been a wake-up call for many brokers to ensure they do not have bad actors in their carrier pools.

“If a carrier has got a satisfactory safety rating, that means they’ve been through an actual DOT audit,” Kiesling said. “It’s almost like a gold star. It means they’ve successfully demonstrated to the government that, ‘hey, I do operate in a safe manner.’ Those conditionally and/or those unrated carriers are now at a disadvantage.”

Kiesling expects an increase in capacity reductions in the long term as questionable carriers and owner-operators face higher insurance costs and increased legal exposure. He also expects vetting technologies to contribute to this trend as they evolve in response to the new legal liabilities. He is hopeful this will help reduce friction over time.

“We’ve been told that several brokers are deactivating or not allowing some of their conditional or unrated carriers to be used in the future,” Kiesling said. “The second thing is we’ve seen a big uptick in customers of ours asking for our documented vetting process.”

It’s important for any processes to be clear, consistently applied and fully documented, Kiesling added. That includes how vetting criteria are applied across all shipments, he stressed.

Kenco ranks No. 39 on the logistics TT100.

The Transportation Intermediaries Association expressed deep disappointment that the decision upended decades of legal precedent and shifted safety standards and responsibilities from the federal government and carriers to states and brokers.

“While brokers are fully committed to safety and to working with federally licensed motor carriers in good standing, the decision imposes an impossible task on brokers,” TIA said in a public statement. “Our members will continue to vigorously defend against negligent selection claims as plaintiffs still must meet applicable legal standards.”

The Supreme Court ruling also carries significant implications for shippers.

“In the past, shippers could focus mainly on cost and service, while brokers and carriers handled most of the compliance burden behind the scenes,” said Blackwell, of Fuel Transport. “Now, everyone involved in carrier selection has to think more carefully about risk.”

Blackwell expects to see more scrutiny around carrier vetting, documentation and ongoing monitoring. That means shippers may rely more on brokers with a demonstrated safety record, and it could lead to more standardized safety and risk benchmarks in the future.

“Across the industry, we’re seeing brokers invest more heavily in carrier qualification programs, safety monitoring tools, compliance reviews and ongoing carrier performance management,” Blackwell said. “Many are formalizing standards that may have previously varied.”

Blackwell views the lack of a consistent benchmark for what constitutes sufficient oversight as a challenge for the industry. He also has seen brokers respond by developing more structured frameworks around onboarding, safety scoring, insurance verification and carrier monitoring to create greater transparency and accountability throughout their networks.

“Compliance can’t be treated as a point-in-time exercise,” Blackwell said. “Vetting a carrier once and filing away the paperwork is no longer enough. The strongest brokerages are moving toward continuous oversight models that combine carrier qualification, ongoing safety monitoring, performance reviews, insurance validation and operational controls.”