A federal appeals court decision and recent high-profile lawsuits have intensified scrutiny over how brokers select carriers and verify their safety and insurance status.
Supreme Court Ruling Sparks Industry Ripple Effects
In May, the U.S. Supreme Court ruled that brokers may be held liable for hiring unsafe carriers. Since the decision, several cases have moved forward, including one involving Echo Global Logistics that was remanded to district court. On June 11, C.H. Robinson was named as a defendant in a Florida case stemming from a fatal U-turn crash that killed three people.
Industry Group Calls for Improved FMCSA Data
An industry group has urged the Federal Motor Carrier Safety Administration to improve public data on carrier safety. Officials stated that current records are inadequate for brokers and shippers to reliably assess whether a carrier has been deemed unfit to operate, maintains proper registration, or carries required minimum insurance coverage.
FMCSA Issues Broker and Freight Forwarder Guidance
On June 16, 2023, FMCSA released regulatory guidance clarifying definitions for “broker” and “bona fide agents.” The guidance also addressed the $75,000 minimum financial responsibility requirement—via surety bond or trust fund—for brokers and freight forwarders, as well as bodily injury and property damage insurance levels for freight forwarders operating commercial motor vehicles.
Carrier Selection Practices Under Renewed Focus
C.H. Robinson Worldwide, Inc., a major third-party logistics provider offering truckload, less-than-truckload, air freight, intermodal, and ocean transportation services, stated that recent legal developments present an opportunity to strengthen transparency and carrier selection practices across the supply chain.