On May 14, 2026 the U.S. Supreme Court ruled that brokers can be found liable for negligent carrier selection under state law.

At first glance this might seem like a broker problem, but shippers are already feeling the effects in the freight market. As capacity tightens and transportation rates climb, shippers need to understand how the Montgomery v. Caribe case impacts their supply chain.

What Happened in Montgomery v. Caribe?

In 2017, truck driver Shawn Montgomery was parked on the highway in his tractor trailer when it was struck by a Caribe Transport truck. Montgomery lost part of his leg in the accident and sued Caribe, the driver who struck him, and C.H. Robinson, the broker that hired Caribe.

C.H. Robinson faced scrutiny for failing to recognize Caribe as an unsafe operation, as the carrier was assigned a Conditional safety rating by the FMCSA.

This case ultimately reached the Supreme Court, which ruled that C.H. Robinson was liable for failing to take “ordinary care” in the carrier hiring process.

Why is this different from previous cases?

Before Montgomery v. Caribe, brokers were generally not held liable for carrier actions under the 1994 Federal Aviation Administration Authorization Act (FAAAA or F4A). Trucking laws in half the U.S. states are stricter than federal regulations – some states mandate more frequent breaks for drivers or have stringent compliance requirements for carriers. F4A preempted state laws that impacted rates and route planning, blocking states from undermining federal deregulation of the trucking industry and shielding brokers from some state lawsuits.

The Supreme Court decided that this precedent no longer applies when it comes to road safety, prompting industry-wide questions about broker liability and carrier safety.

What’s a Conditional Safety Rating?

Most of the ~ 800,000 carriers operating in the U.S. are Unrated by the FMCSA, meaning they do not have an official rating that qualifies them as safe or unsafe.

The carriers that are rated got those ratings from FMCSA audits, which are triggered by complaints or a pattern of safety and compliance violations. Based on the audit results, carriers are assigned a rating of Satisfactory, Unsatisfactory, or Conditional.

A Conditional rating is a warning program for carriers, allowing trucking fleets with safety and compliance issues to operate while they clean up their act. For most brokers, a Conditional rating is a sign that a carrier isn’t fully compliant.

Caribe Transport’s Conditional rating meant the carrier was authorized to operate by the government, and a serious accident occurred anyway. So, if the federal government isn’t the final authority on carrier safety, who is?

Why aren’t safety ratings enough?

At the federal level, there’s a low bar for entry when it comes to registering for an MC number. Anyone with an email, name, and address can start their own trucking company. Scammers and shady operators have historically exploited this process, using stolen identities to set up fraudulent companies or commit freight fraud.

Federal safety scores aren’t bulletproof either. The FMCSA gives carriers Compliance, Safety, and Accountability (CSA) scores based on the results of roadside inspections. When a carrier collects too many safety and compliance violations, it’s easy for the owner to shut that operation down and (unlawfully) sign up for a fresh authority with the same unsafe trucks, drivers, and systems. Networks of these “chameleon carriers” have access to shipper freight across the country, and currently, there’s no federal system to catch them.

The responsibility to vet carriers and protect shipper freight has always fallen on brokers, but not all brokers take this duty seriously. Now, the ones that aren’t doing their due diligence can be held accountable in court.

Who’s impacted by the SCOTUS decision?

In a post Montgomery v. Caribe world, the companies that commit to having a provable process for safety and compliance are in the best position to defend themselves. Brokers especially need a defensible carrier vetting process so that, in the event of a negligent hiring lawsuit, they can protect themselves and the shippers they serve.

As brokers document (and in some cases build for the first time) their vetting processes, carriers face increasing pressure to be as safe and compliant as possible. Carriers with Conditional safety ratings and other red flags might struggle to stay afloat; if brokers won’t book loads with them, they can’t improve their safety scores, and they’ll drop out of business. This will shrink an already-contracting capacity market and force transportation rates even higher.

Shipper liability is still in a grey area as the freight industry adapts to the new legal landscape. A similar case played out in the Texas Supreme Court: Shipper Home Depot was accused of negligent hiring when a carrier they hired directly caused a fatal accident. The court dismissed the claims, stating that a “passive shipper” like Home Depot isn’t responsible for a carrier’s actions.

But this case sparks questions about the future of shipper responsibility: When exactly does a “passive” shipper become an “active” one? How would this case play out in state courts outside of Texas? Brokers were protected by precedents until they weren’t. Could this happen to shippers too?

The most successful shippers prepare for any scenario, and that preparedness starts with the right transportation partner.

How can shippers protect themselves?

This Supreme Court decision might seem to portend the end of brokerages, but shippers can turn to reputable 3PLs to protect themselves and their transportation plans. Hiring carriers directly can expose shippers to risk, both in terms of freight safety and legal responsibility. 3PLs, or brokerages, act as a buffer between the shipper and the carrier while expanding a shipper’s access to capacity.

Shippers can take these steps to protect themselves:

Partner with the right 3PL. Ask your transportation provider about their carrier hiring process. Shaker Logistics uses a robust vetting process that we’ve refined and documented over 30 years of operation. If a 3PL doesn’t have written standards, or doesn’t adhere to that process, that’s a liability risk.
Plan loads in advance or contract a lane with a 3PL for safe, reliable capacity without stretching your budget. Quality last-minute carriers often charge a premium, and the right transportation partner can find them for you. But dedicated capacity on a given lane gives you the most reliable carrier performance.
Understand that pricing and risk are connected. Safety, compliance, and proper vetting take time and resources. Carriers and brokers that charge below-market rates are likely cutting corners in their operations.
Work with partners you trust. Montgomery v. Caribe is about integrity as much as it is about carrier hiring practices. You’ll want a partner you can trust to act in your best interest if anything goes wrong on the road.

What’s next in transportation safety and regulation?

In May of 2026 the federal government announced a new carrier and broker registration system called Motus that will use biometric data and third-party checks for identity verification. Applicants will have to prove they are who they claim to be and prove that the business they represent is legitimate.

This is a step towards reducing fraud and risk across the freight industry, but the initial rollout already has bugs that are stalling progress. Until this system is fully functioning and in effect, fraudulent and unsafe carriers will still populate the load boards. Once Motus is up and running it may be harder for new carriers to enter the market, which would compound the capacity crunch the industry is already facing.

Shippers shouldn’t wait to adjust to the market that Montgomery v. Caribe created. Reach out to Shaker’s team today for a transportation partner you can trust.