9-0: The Supreme Court Ruling That Just Reshuffled the U.S. Freight Market

What Did the Court Actually Rule? 

On May 14, the U.S. Supreme Court ruled 9-0 in Montgomery v. Caribe Transport II. In a unanimous decision, the message was clear: federal law does not protect freight brokers from state-level negligent hiring lawsuits. 

The case started with a 2017 crash on an Illinois highway. Shawn Montgomery had pulled over when a tractor-trailer rear-ended his stopped vehicle. He lost part of his leg. Montgomery sued the driver, carrier Caribe Transport II, and freight broker C.H. Robinson, arguing that Robinson had hired the carrier despite knowing it carried a conditional safety rating and a record of driver qualification issues. 

Justice Amy Coney Barrett wrote the majority opinion. The Federal Aviation Administration Authorization Act, she held, preserves states' authority to regulate motor vehicle safety. Brokers must exercise ordinary care when selecting carriers. Justice Brett Kavanaugh said it plainly in his concurrence: truck safety is a matter of life and death. In 2022, roughly 500,000 truck-related crashes in the U.S. killed approximately 5,000 people and injured another 114,000. 

Who Needs to Pay Attention Beyond Freight Brokers? 

The reach of this ruling goes well beyond the brokerage community. Supply Chain Brain put it directly: the ruling's logic applies to any party in the supply chain that selects carriers and has access to publicly available safety data. 

3PLs, freight forwarders, digital freight platforms. If you can look up a carrier's safety record and you still book them despite red flags, you now face potential state-level tort liability. Shippers who pick carriers directly are equally exposed. Working through a broker doesn't create a legal shield. Neither does contracting directly. Carrier due diligence has become a basic compliance requirement, full stop. 

The insurance market is already repricing. Before this ruling, many brokers operated with the legally required $75,000 surety bond. Asset-based carriers, by contrast, have always carried million-dollar liability policies. That gap is closing fast. Brokers are now being pushed to secure much higher broker liability coverage to hedge against litigation risk. Premiums are headed significantly higher. Large shippers are accelerating their shift toward asset-based carriers to cut exposure to the risks that come with broker carrier selection failures. 

What Was Already Happening Before the Ruling? 

This decision didn't land in a quiet market. It landed on top of a trucking industry already in the early stages of a supply-driven recovery. Transport Topics reported on exactly this dynamic. 

Werner Enterprises Chairman and CEO Derek Leathers was direct: the rate recovery is supply driven. Capacity is exiting the market because of regulatory enforcement. Knight-Swift CEO Adam Miller pointed to federal crackdowns on non-compliant carriers and driver training schools as the force rebalancing supply and demand. That enforcement action has been removing unsafe capacity that spent more than three years suppressing freight rates across the industry. FMCSA and DOT have been revoking illegally issued CDLs, shutting down non-compliant operators, and tightening driver log enforcement. 

The CVSA International Roadcheck, known as DOT Week, ran May 12 through 14. A significant number of trucks voluntarily pulled off the road during that stretch. Spot rates moved sharply higher as a result. 

Where Are Freight Rates Headed? 

FreightWaves CEO Craig Fuller laid out the numbers after the ruling. Roughly 30% of trucks currently operating in the U.S. market carry no safety rating or only a conditional safety rating. As brokers raise their carrier vetting standards under pressure from this decision, a large share of that non-compliant capacity faces systematic exit from the market. 

Spot rates hit $3.55 per mile during DOT Week, a clear cyclical high. Fuller has projected that as the broader washout of non-compliant capacity plays out, spot rates could reach $5.00 per mile in extreme scenarios. 

Knight-Swift has already begun pushing for rate increases on truckload freight. Some shippers are changing how they make procurement decisions, moving away from price-first and toward compliance-first. That shift is most visible in bulk freight and time-sensitive shipments. 

What Does This Mean for Cross-Border Businesses Relying on U.S. Last-Mile Networks? 

Supply Chain Brain made the point clear: this ruling is not just a legal development for licensed brokers. It is a comprehensive redefinition of who bears responsibility for carrier selection decisions across the supply chain. Any party involved in selecting carriers and capable of accessing public safety data needs to reassess its carrier vetting process and compliance framework now. 

The accelerating shift by large shippers toward asset-based carriers is concentrating demand for compliant capacity. The pool of non-compliant or low-compliance capacity is shrinking. As FreightWaves noted, the sharp rise in broker insurance costs will pass through to shippers via freight rates, pushing overall last-mile delivery costs higher. 

As Compliance Thresholds Rise, How Can International Enterprises and Cross-Border E-Commerce Businesses Reduce Supply Chain Risk? 

Supply Chain Brain has noted that logistics providers with robust compliance systems and rigorous carrier vetting capabilities are becoming the default choice for shippers looking to reduce legal risk and operational instability in the post-ruling environment. 

FBD GROUPS provides end-to-end supply chain management for international enterprises and cross-border e-commerce businesses. Specializing in Class 8 and Class 9 Hazmat goods, including UN3480, UN3481, and UN3171 lithium battery products, FBD GROUPS delivers highly specialized 3PL cross-border logistics solutions. As a certified hazardous materials logistics provider, FBD GROUPS operates in full compliance with U.S. and international regulatory standards, maintaining control across every critical stage: international freight forwarding, drayage, warehouse storage, last-mile fulfillment, reverse logistics, and RMA processing. 

To learn how FBD GROUPS can help your business maintain supply chain stability and competitiveness as compliance standards continue to rise, reach out to our team to start the conversation.