ginning to extend their expectations outward, in some cases developing recommended vetting selection crite- ria for third-party brokers in their networks to use. “It’s a brand issue, but it’s also a safety issue,” Sanders said. “I suspect most shippers with a great supply chain reputation will start moving in that di- rection.” The Supreme Court decision is expected to drive some brokers and carriers from the market, but Tuck- er said the companies that are best positioned are those that can demonstrate they have sound process- es in place. “It is going to be incumbent on everyone else to get with the program,” he said.
ercised and trained in carrier selection,” he said. Increased attention on vetting also could affect load boards, which remain an important source of capacity and market information. “Posting services should require more than just someone paying to post, to allow loads to be hauled by anyone who has a truck,” Brenny said. When brokers establish carrier relationships through load boards, technology tools and internal controls become more critical to ensure those carri- ers meet vetting standards, said Sanders of RDS. “With the right technology tools in place, you can make sure your carriers are pre-vetted,” he said. Sanders noted that major shippers are already be-
For Grand Island Express, which also has asset and non-asset operations, nothing, functionally, will change. “As a carrier, we are safe and well known for that. On the non-asset side, increased vetting is something we’ve done regardless,” Albert said. “It doesn’t change our carrier selection, but it does formalize it, so we have a very defined process to stand behind.” Tucker said any party, not just brokers, selecting the carrier should be independently evaluating safety be- yond federal authorization. “Something like 80% to 90% of global forwarders are using outside carriers for the vast majority of their ground transportation, and forwarders, generally speaking, are far less fluent, ex-
Small brokers and carriers contend with added pressure after Montgomery ruling By Mindy Long Special to Transport Topics
ger-term structural changes across the brokerage market. “The scrutiny around carrier selection and carriage management will increase significantly,” he said. “When you couple that with the opportunity to make invest- ments in AI tools and solutions, it’s not hard to foresee a scenario in which you see a consolidation opportunity in freight brokerage.” More robust diligence is already adding expense across the sector, said Deen Albert, vice president of operations for Grand Island Express, which has both asset-based and brokerage divisions. “The types of vetting that are becoming necessary are really not very affordable for a small broker operation and will probably push some small ones out,” he said. Johnson of Leonard’s Express said shippers may begin favoring larger partners that can better absorb legal risk and defend themselves against potential claims. “They’re going to be looking to put themselves a step further away from any potential liability,” he said. That shift is also likely to change buying behavior among middle-market shippers, said Shannon Breen, CEO and founder of freight brokerage FreightVana. Such customers who often rely on small brokers to help
Smaller freight brokers and motor carriers in particular could face additional pressure following the U.S. Supreme Court’s Montgomery v. Caribe Transport II ruling, which has increased scrutiny on carrier selection and risk man- agement in the transportation industry. Even brokers that have prioritized compliance and safe- ty could face a more difficult operating environment as customers and insurers recalibrate expectations in re- sponse to the high court’s decision, trucking and logistics leaders said. “It’s going to be a really challenging ruling for small bro- kers, even the small brokers that were doing everything the right way, simply because of how the shipping community responds to it,” said Kenneth Johnson, executive chairman of Leonard’s Express, which operates asset-based and bro- kerage divisions and ranks No. 84 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. That shift in shipper and insurer behavior, rather than any single operational change, is likely to create new pressure points for smaller transportation providers, Johnson said. A patchwork of state-level standards could increase insurance costs, litigation exposure and operating burdens.” Chris Burroughs , CEO of the Transportation Intermediaries Association “ Businesses with fewer resources to absorb added costs may feel the greatest impact, said Chris Burroughs, CEO of the Transportation Intermediaries Association. “This is a real concern, as most freight brokers are small businesses and do not have large legal departments or un- limited compliance budgets,” he said. “A patchwork of state-level standards could increase insurance costs, liti- gation exposure and operating burdens.” During a press conference promoting consulting firm Ke- arney’s State of Logistics report, partner Andres Mendoza Pena said the added pressure could contribute to lon-
“Shippers are going to be more picky,” Pemberton says. (Pemberton Truck Lines)
had been planning to enter an insurance captive for asset and brokerage coverage as conditions shift. Contingent liability coverage that brokers carry for car- go-related incidents is already written by a limited num- ber of providers, and Johnson said it is likely to become more difficult and expensive to obtain. “The broker that is a two- or three-person office, will they be able to afford contingent liability insurance or even be able to secure it in the first place?” he said. Breen said many small brokers currently rely only on the required $75,000 bond and may struggle to secure ad- ditional coverage. “We’re going to pass them through to shippers. Shippers are going to pass them through to consumers,” he said. Capacity is another concern, Breen added, particularly if smaller trucking businesses have trouble getting vetted or securing consistent freight. “If there is not a healthy spot for small truckers to get vetted, to be able to work and create these businesses, that is a seismic chunk of the trucking industry,” he said. Some industry leaders view the shift as a correction that could remove less safe and noncompliant operators and help to level the playing field for companies already investing in safety and regulatory compliance. “Over the last few years there have been some bad ac- tors that have come into the industry, and it is time for them to go,” said Johnson of Leonard’s Express. A potential danger, however, is pushing too many small brokers and carriers out of the market. “The risk is reduced competition, fewer options for shippers, higher costs for consumers and a less flexible supply chain,” TIA’s Burroughs said, noting that smaller providers play a critical role in serving specialized mar- kets and rural communities.
minimize costs may re-evalu- ate those decisions, he said. “I might like that price, but what risk am I taking on?” For carriers, the ruling in- troduces new hurdles. Bro- kers often require carriers to hold their motor carrier au- thority for a minimum peri- od before accepting loads, and some companies are re- viewing their policies. RDS Capacity Solutions, for one, is considering in- creasing its minimum re- quirement to one year from
nine months, while FreightVana already requires one year. “That kind of shift favors carriers with longer operating histories,” said John Pemberton, CEO of Pemberton Truck Lines. “I think shippers are going to be more picky and choosier with the carriers that they partner with.” The ruling also could hurt carriers without a formal safe- ty rating from the Federal Motor Carrier Safety Administra- tion. TIA’s Burroughs said more risk-averse brokers may avoid carriers with limited data even if they are compliant. Insurance is emerging as another pressure point as costs rise and availability tightens. Breen said FreightVana
July 2026, Issue 1 • Transport Topics 16
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