Week in Review: Logistics market reacts to court ruling 

The story in the transportation market this spring has been soaring fuel prices. 

There was some slight good news this week as diesel prices dropped 4 cents per gallon but remains more than $2 higher than this time last year. 

But the big story has been the Supreme Court ruling that federal law does not protect freight brokers from state law negligence claims. 

Blue Book talked to Marsh McLennan, an insurance brokerage vendor partner, who gave us some solid analysis on the ruling. Expect higher prices as a result but a higher value on safety and accountability. 

Marsh McLennan analysts said the ruling should affect large and small logistics companies alike, but investors think differently, as large transportation companies’ stocks have seen an uptick this week. 

C.H. Robinson was among the defendants in the court case and essentially lost, but its CEO recently said he believes that 20-30 percent of smaller brokers could exit the market, and larger firms are likely to pick up that business.

Blue Book’s Vice President of Claims, Collections & Dispute Resolution, Doug Nelson, says he’s also heard the speculation that the ruling may disproportionally affect smaller brokerages who are less able to absorb the additional costs, leading to consolidation. 

He says the ruling is a good reminder for everyone who hires carriers to use due diligence when hiring.   

“Overlooking red flags may allow you to cover a load, but taking risks with someone else’s safety is not the way to go,” Nelson says.  

“It’s worth taking a moment and considering, ‘How would my actions sound to a jury who has just heard from a victim who had their life changed forever by an accident?’  Accidents are going to happen, and any broker could find themselves in court, but it’s a good reminder that you want to be a professional on every load.” 

If the result of the ruling is a safer transportation industry that prioritizes accountability, albeit with added costs, might that be a good thing? 

This is a story that isn’t going away, and we will continue to cover its impact.