The U.S. Supreme Court's decision in Montgomery v. Caribe Transport II LLC changes how freight brokers should approach carrier selection and documentation. While the ruling centers on freight broker liability, it also has broader implications for motor carriers, shippers and transportation risk management.

Motor carrier vetting is hardly new for freight brokers. Most already have some process for reviewing operating authority, insurance coverage and other qualification requirements before assigning freight.

What the U.S. Supreme Court’s recent decision in Montgomery v. Caribe Transport II LLC changes is how carefully brokers must now document and defend carrier selection decisions.

Freight brokers will feel the effects most directly, but motor carriers and shippers are not immune. Across the transportation industry, the decision is forcing a hard look at how companies evaluate transportation partners, document those decisions and demonstrate they took reasonable steps to support public safety.

What the Montgomery v. Caribe Ruling Means for Transportation Companies

At its core, the Supreme Court's decision allows certain state-law negligent hiring claims against freight brokers to move forward, increasing the importance of documenting carrier selection decisions. Until now, freight brokers in most parts of the country could use federal law preemption to get negligent hiring claims dismissed early in the process and before they reached trial.

The Supreme Court’s decision in Montgomery closes that door, ruling that states have the authority to regulate motor vehicle safety within their borders. The practical impact depends on where a broker operates. Those in the Sixth and Ninth Circuits — covering Kentucky, Michigan, Ohio, Tennessee, California, Oregon, Washington, Arizona, Nevada, Idaho, Montana, Alaska and Hawaii — already operate under this standard. For brokers elsewhere, the ruling marks a significant shift.

The ruling has implications throughout the transportation supply chain:

• Freight brokers outside the Sixth and Ninth Circuits are now exposed to negligent hiring claims under state law, a liability that federal preemption once kept largely off the table. Beyond the courtroom, brokers that lack a documented vetting process may also find coverage harder to secure as insurers reassess their exposure.

• Motor carriers with lower safety scores will likely be passed over by brokers, regardless of how competitive their rates are or the nature of their relationships.

• Shippers that select brokers without scrutinizing their vetting practices may find themselves exposed to liability if an incident occurs.

How Freight Brokers Can Strengthen Their Carrier Vetting Process

Many brokers have long had baseline vetting practices in place, but Montgomery v. Caribe raises the bar. Brokers will need to go beyond simply checking insurance, confirming operating authority and verifying a DOT number to demonstrate that reasonable care was exercised in carrier selection, particularly when questions arise after an incident.

That pressure is already building from insurers. As exposure evolves, underwriters are raising premiums to account for increased broker liability and adding carrier vetting questions to contingent policy applications.

Brokers should focus on the following areas to build a defensible process and secure the most favorable coverage terms:

• Establish and maintain carrier review files. Document operating authority, insurance verification, carrier safety record reviews and any other factors considered during onboarding. Update records on a regular cadence — six-month reviews at a minimum.

• Enforce consistency. When qualification standards exist, employees must follow them every time. Exceptions should be rare and require documented rationale.

• Invest in employee training. Staff responsible for carrier selection need to understand company procedures, know how to evaluate safety data and document their actions. Keep training records and conduct refresher courses.

• Review indemnification provisions. Many brokers are revisiting contractual protections with motor carriers as part of a broader risk transfer strategy.

• Leveraging onboarding technology. Sophisticated tools that go beyond basic credentialing to verify carrier and driver identity, and track compliance on an ongoing basis, give brokers a more defensible foundation for their vetting decisions.

Montgomery v. Caribe may also accelerate a shift from point-in-time carrier vetting to continuous monitoring. Brokers that routinely review carrier safety performance, insurance status and operational risk indicators will be better equipped to defend their selection decisions than those relying on onboarding checks alone.

The objective is not to eliminate every possibility of litigation, but to establish a repeatable process that creates a defensible record of decision-making.

Why Safety Performance Matters More for Motor Carriers After Montgomery

As brokers tighten carrier selection standards post-Montgomery, safety performance will increasingly become a prerequisite for doing business, not just a compliance requirement.

Expect brokers to evaluate SAFER scores, CSA data and inspection results when deciding where to place business. For carriers with sophisticated safety practices, that scrutiny is a chance to stand out in a more competitive selection process.

Carriers that fall short may find themselves cut off from freight opportunities, preferred broker networks and shipper routing guides. Low safety scores will also increasingly affect insurability, driving up premiums as underwriters reassess carrier risk profiles.

Motor carriers should focus on:

• Vehicle maintenance. Tires, brakes and lighting systems are among the most frequently cited violations. A consistent maintenance program reduces both safety risk and inspection exposure.

• Driver qualification and compliance. Hours-of-service compliance, driver qualification records and DVIR compliance all contribute to a carrier’s overall risk profile.

• Telematics. Beyond identifying risky behaviors, telematics data can provide measurable evidence of a carrier’s commitment to safety. Tracking speeding, hard braking, distracted driving, seatbelt usage and other driver behaviors allows carriers to implement targeted coaching and training programs that improve safety outcomes over time.

Carriers that invest in safety now will be better positioned to secure freight opportunities and build stronger broker relationships going forward.

Why Broker Selection Matters More for Shippers After Montgomery v. Caribe

Although Montgomery v. Caribe affects freight brokers most directly, shippers are not insulated from its effects.

When a broker fails to adequately vet a carrier and an incident occurs, liability exposure can travel down the supply chain. Shippers that select brokers primarily on cost, without considering how those brokers evaluate and monitor carriers, may find themselves next in line.

Areas worth evaluating include:

• Broker carrier-vetting procedures. Understand how brokers evaluate, approve and monitor motor carriers.

• Documentation and risk management practices. Review whether transportation partners maintain consistent, documented qualification processes — not just at onboarding, but on an ongoing basis.

• Insurance requirements. Premiums across the transportation supply chain are expected to rise in response to Montgomery. Confirm that brokers and carriers carry adequate coverage that aligns with your organization’s risk tolerance.

• Indemnification provisions. Review how responsibility is allocated among shippers, brokers and carriers if an accident occurs. Contract language deserves a fresh look as the legal landscape evolves.

The lowest-cost option is not always the lowest-risk option. Safety performance and operational discipline should factor into transportation decisions alongside rates and service levels.

Documentation Is the Foundation of a Defensible Carrier Vetting Process

Regardless of how future cases are decided, Montgomery makes one thing clear: informal processes and institutional knowledge are not a defense. Organizations that can demonstrate what information they reviewed, what standards they applied and why they made a particular decision will be better equipped to respond to questions from insurers, customers and, potentially, the plaintiff’s counsel.

Technology can help support those efforts. FleetLytics, for example, provides tools for carrier onboarding, compliance tracking, document management and audit trail creation—helping organizations build a consistent and defensible record of carrier qualification activity.

Technology is also expanding beyond compliance and documentation. Emerging technology that helps confirm that the individual arriving to pick up a load is the authorized and vetted driver assigned to the shipment will help reduce fraudulent pickups, cargo theft and driver identity fraud. For brokers, carriers and shippers, that added layer of verification strengthens the overall security of the supply chain.

Post-Montgomery, documentation and the right technology have become the baseline for protecting your organization when questions arise.

For more information about what this decision means for your fleet, contact Alliant Transportation.