The Supreme Court’s ruling that freight brokers can be held liable in highway accidents and last week’s nuclear verdict against C.H. Robinson have forced brokers to review their motor carrier selection process. 

The Transportation Intermediaries Association has petitioned the Federal Motor Carrier Safety Administration to establish a clear carrier selection standard and to make a “high-risk” carrier list publicly available. 

In the meantime, there is a void as brokers try to determine how to stay out of the courtroom. Enter Cassandra Gaines, a transportation attorney, expert witness, and founder of Carrier Assure.

Gaines recently published “The CAVRA Standard,” a free, 54-page document designed to give the industry a common language for the difference between reasonable business judgment and preventable carrier selection failures.

“This is not about perfection. It is about making a reasonable and defensible decision based on the information available at the time,” Gaines wrote in the CAVRA document, which stands for Carrier Assessment, Verification, Risk, and Accountability. 

The basics of motor carrier vetting 

Brokers know that operating authority and active insurance are only baseline requirements for carriers. They do not alone prove they are properly equipped to handle every shipment. Roadside inspection history, safety ratings, and crash information are among the factors brokers should consider. 

What is ultimately considered reasonable by a judge or jury could also depend on freight type, commodity, lane, distance, equipment, or market.

The bottom line is that freight brokers need a written vetting process that documents minimum standards covering operating authority, insurance minimums, driver qualifications, inspections, fraud, double brokering, exceptions, and monitoring. 

In an advisory blog published after the Supreme Court decision Montgomery v. Caribe Transport II, regulatory specialists J.J. Keller & Associates said that safety history and driver qualifications are likely to carry more weight because litigants will look for red flags and argue that a reasonable broker should have acted differently.

The goal is for vetting process is consistency in the safety categories reviewed, the required performance thresholds, and the consequences when a carrier exceeds those standards.

Hard stops and exceptions 

The right carrier vetting process starts with clearly defined “hard stops,” such as a carrier having an unsatisfactory or conditional safety rating, or not having an active MCDOT number. 

In the days following the Supreme Court decision, C.H. Robinson stopped working with carriers that have a conditional rating. Other recommended hard stops include being unable to verify minimum insurance requirements or being unable to connect with a carrier using an FMCSA-reported phone number and email address.

The right policy also allows for exceptions, “but they have to be controlled,” Gaines said. 

Exceptions should not be made on a load-by-load or individual carrier basis, and should be closely reviewed, approved, and documented. If the company believes the safety rule should change, it should revise the policy. 

There should be an assumption that exception approvals will be requested and analyzed during any litigation, according to J.J. Keller. 

Attorneys have a post-Montgomery decision playbook

Even before last week’s nuclear verdict against C.H. Robinson, attorneys were already publicizing the post-Montgomery decision playbook. 

“The vetting process is now the product. Every carrier selection decision is a potential exhibit in future litigation,” law firm Gordon Rees Scully Mansukhani wrote to clients. “Brokers that invest in documented, systematic vetting protocols will be in a fundamentally different legal position than those that do not.”

The firm, which has 85 offices and more than 2,000 attorneys across the United States, added: “The cost of building that infrastructure is real. The cost of not building it is now potentially catastrophic.”

Likewise, Car Warriner of Searcy Law outlined how carrier vetting can be used against brokers after an accident involving a motor carrier. 

“Through interrogatories and corporate representative depositions, build toward one of two conclusions: either no meaningful vetting protocol existed, or the broker violated its own protocol,” Warriner said. “Either way, negligence is proven.”

Changes since Montgomery decision are being noticed

Executives with two of the largest trucking companies — both with brokerage operations — said they were beginning to see the landscape changing.

“The Montgomery ruling could structurally change the economic incentives for a large share of the brokerage space that all too often have pursued the cheapest possible capacity with less regard for carrier safety and quality,” said Adam Miller, CEO of Knight-Swift Transportation.

Miller said more shippers are asking questions about carrier vetting practices, with some insisting on having the right of approval. Additionally, insurers are looking to introduce exclusions regarding carrier vetting practices, “which, if not strictly followed, could lead to a lack of coverage for an accident. 

Miller said even though Knight-Swift has a “rigorous” carrier vetting process, “our premium rates increased to multiples of our prior coverage within just a few weeks of the Montgomery decision.”

Nicholas Hobbs, chief operating officer of J.B. Hunt Transport Services, said the company has seen “more carriers come to our platform and more carriers getting approved” since the Montgomery decision.

Hobbs speculated these carriers were moving away from smaller brokers.

Emphasis on fight against double brokering

The growing legal expectations and consequences surrounding carrier vetting extend beyond just highway safety and include efforts to spot double brokering and fraudulent identifications. 

“Did anything during dispatch, pickup, transit, delivery, or payment create actual knowledge of a problem?” the CAVRA document asks. 

It recommends shippers pay close attention at pickup to ensure there are no mismatches in motor carrier or freight documentation before releasing the load.

“There is no quicker way to get sued than a double brokered shipment,” said Gaines.