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Safe Harbor for Freight Brokers
This topic deals with freight brokers and shippers and their efforts to make a “proper” selection of a motor carrier. There’s no assurance that they won’t be prosecuted if they make a bad selection.
I’ve written about this issue numerous times and probably need to archive my messages according to topic. But that’s another story.
It’s because this issue – and others – are evolving. Getting clarity is not easy. It may take years for some issues in the pipeline to reach the necessary desired degree of clarification and guidance.
Nevertheless, I’m hoping my comments here bring added value to your day if you are in logistics or thinking about getting into this industry.
So, here we go …
Numerous freight brokerages have been penalized big time for their negligence in selecting a carrier.
When this happens, the broker normally breaks the independent contractor relationship with the motor carrier and then assumes the liabilities that the carrier may incur.
God forbid a carrier crashing where injury or death occurs.
It’s happened more than you think. [Let me interject here: a huge portion of truck drivers are the safest you’ll ever find on our highways. It irks me to no end to see these billboards trying to demonize trucks as the cause of accidents. Not true.]
If and when you get a sizable amount of business, you may become a target for attorneys seeking deep pockets. And, I imagine, it may occur even with modest amounts of money in your bank account.
Brokers are getting sued because of state laws that attorneys use to make their move. There is a federal law on the books, however, that may preempt state law. Several appeals courts have adopted this position. This may be the safe harbor brokers are seeking.
In these cases, on-going legislation may result by providing safe harbor for brokers and shippers and save them from litigation.
Without going into all the detail, there is enough litigation in favor of protecting brokers and we may witness the Supreme Court making a review.
The Supreme Court has ignored previous court cases, but it may be difficult to avoid this issue as things have been unfolding.
Keep in touch with my messages here.
Lastly, this issue is tied to efforts to create a national carrier hiring standard; but again, this topic has not taken hold.