Carrying the cost of liability

The finding in May this year that CH Robinson was liable for negligence in selecting an unsafe motor carrier has raised concerns for brokers, carriers and shippers across the US. In the case Montgomery v. Caribe Transport II, the Supreme Court ruled unanimously that freight brokers can face negligent hiring lawsuits and are not shielded by federal pre-emption.

The case was brought by Shawn Montgomery, a driver who was seriously injured when his stationary truck was hit by another truck driven by an employee of Caribe Transport II. CH Robinson, one of the largest freight brokers in the country, had arranged the shipment. Having been passed up from the district courts, the Supreme Court’s decision now directly impacts the motor vehicles that will be on the road as a result of the carrier selection process.

As a third-party logistics provider (3PL), Eve International Logistics is paying close attention to the downstream consequences of the court case for future carrier partnerships in the automotive supply chain. Eve has historically had a strict carrier vetting process, and it will now be subject to more rigorous oversight and comes at a time when freight volatility, carrier identity fraud and record enforcement failure rates are already forcing automotive companies and their brokers to rethink how they select the carriers they use.

Scoring for hauls

According to Nikola Delic, founder and director of sales at Eve International Logistics, having a strict carrier vetting process is an important prerequisite to success. The company uses four platforms with which to check carrier credentials.

The first, called Highway, is used by freight brokers and 3PLs to verify motor carrier identities in real-time, prevent double-brokering and automate compliance. If they pass that check, Cab Report provides comprehensive, up-to-date information on carriers’ safety and overall operations. The next platform is Carrier 411, which consolidates safety data, insurance details and operating authority from the Federal Motor Carrier Safety Administration (FMCSA). Finally, Bluewire combines data across nine critical categories alongside safety ratings and external legal factors, benchmarking carriers using 30 KPIs to come up with a GAP Score to summarise overall risk and highlight specific operational vulnerabilities.

“There is a minimum score that a carrier must hit across all four of these platforms to be able to haul for us,” says Delic, adding that Eve has daily and weekly monitoring to view these trendlines.

Relationship building

A robust selection process, attention to best practice and alignment with the carrier agreement across all safety and standards is as much as 3PL can do to reduce risk. Eve International Logistics’ rating standard forms the basis of a relationship between 3PL and carrier that Delic says it is important to maintain, even to the extent of investing in rented equipment to secure capacity, something that gives Eve International Logistics an advantage in competing for business.

Investing in carrier relationships is important for surviving turbulence in the market, as the industry has seen in recent months, and is going to likely see for the rest of 2026. Fuel cost is high thanks to the ongoing conflict in the Middle East and capacity is going to be tight in the run up to Christmas, with spot rates expected to skyrocket, according to Delic.

“Hopefully, fuel prices will stabilise but nobody knows what is going to happen,” he says. “We expect elevated prices to the end of the year… and customers are preparing and expecting those elevated prices.”

“Everyone has capacity when the market is favourable, but you have to keep your current carriers happy for when it isn’t,” says Delic. “We do that by providing a good service so, when there is a big fluctuation in the market, we are able to ask for a reasonable increase based on the services we provide.”

Diversity is also important when investing in carrier relationships. Industry leaders need to look at getting a balanced mix in their logistics provision between asset-based carriers and 3PLs, big and small, with proper scrutiny of their strengths in terms of location and technology. According to Delic, it is important to have different strategies and recovery options.

Cost of control

At a time of market fluctuation and volatility, the increase in the strictures on carrier selection and the digital tools used assess them is going to affect pricing. It is also going to increase the cost of due diligence in the selection of carriers, according to Delic.

“Bigger carriers, those with $100m-plus in annual revenue, do not want to risk their reputation by putting the wrong carrier on a load,” he says, but shippers are also concerned what the added cost in securing reliable carriers means for their RFQs. Some OEMs are putting additional requirements on “umbrella insurance” while others are instituting rate-control systems on the brokers, which prevent them from charging more than a 10% margin, according to Delic. “Some shippers are using the tools we use to control the brokers,” he says.

That is going to change how the market looks in the next few years, with a lot more activity around mergers and acquisitions as bigger players, who can afford the due diligence legal costs, compete where the smaller players cannot.

“Small mom and pop brokers cannot afford to pay the due diligence attorneys and cover all the platforms because the cost per load would more than they can make on it. We’ll see a lot of changes in the next few years,” says Delic.

Higher insurance costs are also likely to affect the broader market, an added concern for the smaller 3PLs. Eve International Logistics already puts additional insurance on the transport of high-value goods to ensure protection for the customer, but many will be facing primary liability going forward.

“There is going to be a lot on the broker’s plate to manage the risk and carrier selection,” says Delic. “There will be case-by-case insurance for high-value goods, and it will be interesting to see how that will affect the broader industry.”

Investing in visibility

Technology and personnel costs are also likely to increase as companies look to put safeguards around their shipments. As well as extra IT security, logistics companies are looking for greater access to shipment locations, including at the OEM docks, so they can check driver credentials, the condition of the freight and whether the right load is allocated to the scheduled driver.

Delic says OEMs need to provide more visibility by giving 3PLs access to operations so staff can see what is going on. “We need to better understand their business and how their shipping works because each plant is different,” he observes. “I think it is important to understand the ecosystem for each individual shipping location and use existing AI tools and tracking. That is key to make sure that we have a smooth shipping organisation.”

Investment in technology is essential for better visibility and Eve International Logistics has integrated its transport management system with the Highway platform, as well as investing in a range of other digital tools to provide real-time freight visibility and automated freight matching.

A greater investment in technology in terms of autonomous trucks is also on the horizon. “In the next 5-10 years we are going to see a lot more autonomous trucks on the roads, especially between major cities, on the major interstate highways,” says Delic, adding that the high cost of freight shipping will create a push to regulate autonomous vehicles on the road.

There are a lot of unknowns for the automotive logistics in the next few years which are going to have an impact on trucking industry, resulting in bigger players and more aggressive competition. One thing is clear from the Montgomery v. Caribe Transport court case, however, and that is risk management in the selection of transport provider, whether carrier or 3PL, is going to be subject to higher scrutiny and stricter standards.