Freight Brokers Urged to Strengthen Vetting Practices

The Supreme Court’s ruling in Montgomery v. Caribe Transport II has prompted the freight brokerage industry to reassess its carrier-vetting practices. The court ruled that federal law does not shield brokers from state negligent-hiring lawsuits, removing a defense widely used in litigation. Experts say brokers must now ensure their vetting processes are documented, consistent, and defensible in court. The ruling is prompting brokers, insurers, and shippers to reassess vetting practices, contracts, and ongoing carrier monitoring. Legal experts are urging brokers to bolster their carrier-vetting practices, with Marc Blubaugh, co-chairman of the transportation and logistics group at the law firm Benesch, stating that brokers are facing the same risks they did before the ruling, but now without a key defense. Josh Lovan, industry business adviser at J.J. Keller & Associates, noted that the ruling has ‘lit a fire under a lot of brokers,’ particularly smaller ones that may not have had robust vetting processes in place. Adam Green, senior vice president of logistics at the insurance brokerage firm Brown & Brown, called the ruling ‘monumental’ and said it provides an opportunity for brokers to revisit their processes. Experts stress that brokers should have written policies governing how they onboard and monitor motor carriers, and that personnel responsible for these tasks should be trained to understand and follow the company’s policy. J.J. Keller has been assisting clients in building their own carrier-evaluation processes or leveraging its in-house Carrier Risk Review Service. The company’s Josh Lovan emphasized the importance of having a fully documented, defendable, and consistent process for vetting carriers, and treating onboarding as an ongoing process rather than a one-time checkbox.