The U.S. Supreme Court's unanimous ruling in Montgomery v. Caribe Transport II has eliminated federal preemption protection for freight brokers that hire unsafe carriers, and legal experts confirm the logic extends directly to shippers who fail to conduct documented carrier compliance reviews. An estimated 1.2 million trucks — roughly 36% of the U.S. fleet — have no FMCSA safety rating, while another 300,000 operate under 'conditional' ratings, the highest-risk designation recognized by regulators and courts. Responsible freight forwarders and shippers are now excluding these 1.5 million unrated and conditionally-rated vehicles from their supply chains, equivalent to a structural capacity reduction larger than any single market event in industry history. Insurance costs for freight brokers are projected to rise 5x, with costs ultimately flowing through to shippers via higher freight rates and surcharges. Legal experts describe the ruling as fundamentally ending the era of selecting carriers based on lowest price alone.
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