A recent Supreme Court ruling is reportedly shaking up one corner of the trucking industry.
As Bloomberg News reported Thursday (Aug. 20), the ruling in May opened freight brokers—who connect companies to drivers who haul their goods—to lawsuits if a driver for a contracted carrier is involved in an accident.
According to the report, there is already evidence of what that ruling’s impact might look like for the sector. A jury in Texas last month recommended $604 million in damages against one of the U.S.’s biggest freight brokers and two other defendants.
That case involved a fatal crash in Mississippi in 2021 in which a truck driver collided with stopped traffic. Broker CH Robinson had arranged the shipment of products with the company which owned that truck.
The suit accused the broker of failing to take steps to make sure its shipment was safely transported and had not properly screened the companies it hired. CH Robinson told Bloomberg it has a strong safety record, disagreed with the verdict and was confident in its appeal chances.
But since the ruling, the report said, brokers such as Daniel Ilg, president of ILG Logistics, are much more cautious in choosing the companies they’ll use, favoring bigger and more established trucking operators with well-established safety records.
Before the Supreme Court ruling, Ilg’s employees had 15,000 to 18,000 carriers they could match with their customers’ freight, Bloomberg said. That number has shrunk to a little more than 8,000. ILG now uses criteria based solely on government safety data to find trucking companies, rather than factors like past relationships.
If a carrier falls below a certain safety level, “there is no relationship that my attorney is going to be okay with” supplanting the safety data, Ilg told Bloomberg.
In related news, PYMNTS spoke last week with André Luis Martins Filho, founder and CEO of Freight Hero, about the technological disconnect brokers are dealing with.
They’ve spent years investing in things like automation and artificial intelligence (AI), though many still depend on people making phone calls, tracking drivers, updating shipment records and resolving exceptions by hand.
The technology has improved, but the economics have not changed that much, with many companies still selling AI as software rather than outcomes.
“Our customers don’t want to become AI experts,” Martins Filho told PYMNTS. “They don’t want to fully understand and deep dive into the technology and understand the nuances and the intricacies of building your evolved system of coordinating model optimization … They want to see their job done. They want to see their job done more efficiently, and in a scalable way that preserves their costs.”
