As an owner-operator, you’re in control of the ownership of both a truck and a trucking business. Due to a recent U.S. Supreme Court ruling, managing your reputation for safety is increasingly important.
If you’re not familiar with the case, here’s a quick recap:
The recent case stems from a December 2017 crash in which a truck, licensed by Caribe II Transport, drove onto the shoulder of Interstate 70 in Illinois, striking a vehicle that had been pulled over for repairs. The driver of the parked vehicle, Shawn Montgomery, suffered the loss of a leg and other injuries in the crash.
Montgomery sued the driver of the truck, the carrier and C.H. Robinson, the broker that hired the carrier for the load. C.H. Robinson asked to be excluded from the case on the grounds that the company couldn’t be held responsible due to a law that prohibits state and local jurisdictions from enacting or enforcing legislation related to price, route or service of any motor carrier, broker or freight forwarder.
That law, the Federal Aviation Administration Authorization Act (FAAAA) reserves most control of the transportation industry to the federal government. However, it contains a “savings clause” (commonly referred to as the “safety exception”). That’s important, because without it, states might be prohibited from passing traffic or other safety laws that impact commercial vehicles involved in interstate commerce.
The question district courts have disagreed over in multiple cases is this:
“Are claims of negligence against brokers in state and local courts prohibited by FAAAA, or are they permitted under the safety clause?”
C.H. Robinson claims brokers are exempt under the law. In a rare unanimous decision, SCOTUS decided that the safety clause DOES allows such claims, allowing the inclusion of the broker in the lawsuit.
What does this have to do with owner-operators?
Much has been written about the impact of the decision and its impact on the trucking industry as a whole.
But if you’re one of the millions of small carriers that uses brokers for your business, the decision will impact you directly.
If brokers can be held liable for choosing unsafe carriers, they will be much more selective about who they choose to transport loads. It’s a sure bet that they already have legal teams working on how to best protect themselves from liability claims.
Some tightening of their standards is sure to come.
To be sure, claimants will still need to prove negligence in court to prevail against brokers.
Your safety record will be vital to your survival as a business.
The SCOTUS ruling doesn’t make brokers liable for unsafe carrier actions; it simply says they are not excluded by the FAAAA. However, brokers WILL be much more diligent in checking the safety records of carriers — and this includes owner-operators — with which they do business.
The goal will be to document the process so that in the event of a crash, the broker can prove they did their best to make sure the carrier was safe. Expect safety records like the government’s CSA (Compliance, Safety, Accountability) files to be gone over in detail — perhaps even to individual inspection reports and violations.
Traffic violations just got more serious. Accident reports will be examined. Consumer reports containing the driver’s work history may be demanded.
To make matters worse (or better, depending on your point of view), sharing information is much easier these days. Software companies that gather and share safety information will become one-stop resources for some brokers.
Because it’s all computerized and shared, negative information will be widely available. Your ability to talk to a broker and explain any negative information in your file will likely diminish, because the broker knows any information in your file is available to liability lawyers — who specialize in targeting any “weak spots” to win a case.
It’s time to take control of your reputation.
As an owner-operator or small business owner, it’s important to take ownership of your reputation and keep it as clean as possible.
Making sure your driving record is as free of violations and crashes as possible is a good start.
Citations that weren’t much more than nuisances in the past can now shut down your business. Crashes on your record will invariably raise questions, so you’ll need copies of accident reports or even court cases that exonerate you of responsibility.
If there’s incorrect information about you in the DataQ system, follow the process to have it corrected or removed from your record. You can’t afford not to.
If you DO get a ticket, simply sending in the payment may not be in your best interest. Legal services are available to help you fight the charges. Even if you can’t get the charges dropped, you may be successful getting them reduced to a lesser charge.
Anything that helps your overall record look better is to your advantage.
Unquestionably, it will become harder to establish relationships with brokers.
If you’re currently a company driver and thinking about buying a truck and getting your own authority, this is an important consideration.
Many brokers already won’t work with carriers that have less than a year of experience, and that number will grow. Carriers without an established record of safety will have a difficult time getting accepted. If your transportation business is less than a year old, it may be more difficult than ever to get brokers to do business with you.
When you find a broker to work with, do all you can to preserve that relationship. Strive for on-time service and build a reputation as someone who’s good to work with.
No one knows at this point how the ruling will impact trucking costs.
It’s likely that expenses will rise. Brokers may choose to keep more of the income from shippers to cover potential liability costs. Minimum liability insurance requirements may rise as brokers ask for more coverage to protect their interests, pushing insurance costs higher.
Finally, some brokers may elect to assign more loads to larger carriers that have established safety programs and clean records, making fewer loads available to the spot market.
While the headlines make it seem that the court ruled against brokers, keep in mind that the repercussions will be felt by everyone involved. Keep your record as clean as possible, maintain good working relationships with brokers and keep a close eye on costs to minimize any negative impact on your trucking business.
Cliff Abbott is an experienced commercial vehicle driver and owner-operator who still holds a CDL in his home state of Alabama. In nearly 40 years in trucking, he’s been an instructor and trainer and has managed safety and recruiting operations for several carriers. Having never lost his love of the road, Cliff has written a book and hundreds of songs and has been writing for The Trucker for more than a decade.
