Freight brokers have less protection from negligent-selection lawsuits after the Supreme Court’s freight broker liability ruling this May. In Montgomery v. Caribe Transport II, the Court removed the early-dismissal defense brokers had relied on, so your carrier vetting process must hold up in front of a jury.
If you run a brokerage division alongside your own fleet, it’s your responsibility to vet carriers in a way you can defend if a claim is filed against you. That responsibility carries more weight now that cargo theft losses have hit record highs.
This guide covers what changed, what to check before a load moves, and what your documentation should look like.
Key Takeaways
- You can no longer get a broker liability lawsuit dismissed early. The Supreme Court’s Montgomery v. Caribe Transport II ruling removed the early-dismissal defense, so your carrier vetting process must hold up in front of a jury.
- Active FMCSA authority proves legality, not safety. FMCSA says nothing about safety history. A newly issued or recently transferred MC number tells you nothing about a carrier’s track record.
- Cargo theft is getting more expensive. Losses hit an estimated $725 million in 2025, up 60% from the year before, with the average loss per incident up 36%.
- Fraud tactics are much more sophisticated. Tactics like identity theft, double brokering, and buying old operating authorities are designed to pass a quick, surface-level carrier check.
- Documentation is what protects you in court. Written approval criteria, a record of who approved each load and why, and a status recheck immediately before tender give you a defensible process.
What Carrier Vetting Means
Carrier vetting is the process of confirming that a carrier is legitimate, licensed, insured, and safe to haul your freight before you tender or accept the load. Load matching and carrier sourcing solve a different problem: they tell you who’s available and what they’ll charge, not whether the carrier is safe or legitimate.
For a carrier that also brokers freight, this check runs both directions. When you hand a load to an outside carrier, you carry the same exposure a non-asset broker carries. And the shipper or upstream broker tendering freight to you is running their own version of this check on your operation, so knowing what they’re looking at is useful on both sides of the transaction. That dual exposure is sharpest for carrier-brokers running roughly 25 to 500 trucks, though the same check applies whether you’re running 12 trucks or 1,200.
Why Carrier Vetting Carries More Risk in 2026
Reasonable Isn’t Enough Anymore
The Supreme Court ruled 9-0 that state-law negligent-hiring claims against freight brokers aren’t preempted by the Federal Aviation Administration Authorization Act (FAAAA) when the claim concerns motor vehicle safety. For years, brokers facing a negligent-selection suit could argue federal preemption and get the case thrown out before discovery. That argument is gone. The Montgomery decision doesn’t create a new federal carrier-vetting standard, and FMCSA hasn’t published a checklist in response. What it created is exposure to full litigation.
The practical standard is whether your policy was reasonable and whether you followed it. Justice Kavanaugh’s concurrence noted that a broker who hires carriers under a reasonable policy and asks the hard questions shouldn’t run into a problem. In practice, that means brokers need proof they vetted the carrier appropriately. A carrier-vetting policy isn’t enough. Without that proof, you’re liable when something goes wrong.
Cargo Theft Losses Hit Record Highs
Cargo theft losses hit an estimated $725 million in 2025 across the US and Canada, a 60% year-over-year jump, with the average value per theft climbing 36% to $273,990. Total event counts stayed roughly flat while confirmed incidents rose 18%. Criminals are picking higher-value loads while running roughly the same number of thefts.
Fraud Is Built to Beat Your Checks
Fraudsters are becoming more sophisticated, and their tactics are increasingly tech-savvy. Freight fraud has shifted toward:
- Identity theft – impersonating a legitimate carrier or broker’s authority
- Double brokering – re-tendering a load to an unvetted carrier without the original broker’s knowledge
- Authority-buying – acquiring an older, clean MC number to skip scrutiny
- GPS or tracking-data spoofing – masking where a shipment is
Each of those tactics is designed to survive the exact checks carrier vetting is supposed to catch.
What to Verify Before Tendering or Accepting a Load
Six checks carry most of the weight in a sound vetting decision. Insurance verification and fraud red flags deserve deeper treatment, covered below. Here’s what to check first:
- Authority status, and how long it’s been active. Pull the carrier’s FMCSA/SAFER record and confirm active authority. Then look at the date. Authority that’s been in place for years under the same identity carries a track record you can evaluate, while an MC number issued last month or one that changed hands recently carries none.
- FMCSA safety rating, if one exists. While you’re in SAFER, check for a rating too. FMCSA assigns Satisfactory, Conditional, or Unsatisfactory ratings after a compliance review, and it’s not a formality: Caribe Transport, the carrier in the Montgomery case, was operating under a Conditional rating with documented deficiencies in driver qualification and hours-of-service compliance. Most small carriers have never been reviewed, so no rating on file isn’t clearance. It just means there’s no data yet.
- Operating history and ownership stability: Look at operating history versus doing a point-in-time authority check. One check can’t see churn. Frequent business name changes, ownership transfers, and re-registrations are sometimes ordinary business events, but they can also be a way to leave a safety or claims history behind.
- CSA and Safety Measurement System (SMS) BASIC scores: The SMS scores carriers across seven categories:
- Unsafe driving
- Hours-of-service compliance
- Driver fitness
- Controlled substances and alcohol
- Vehicle maintenance
- Hazmat compliance
- Crash indicator
The scores help prioritize carriers for intervention, so they carry no safety rating and do not certify anyone. Treat a bad BASIC score as a question to ask, and treat clean scores as one input among several.
- Out-of-service (OOS) indicators and inspection patterns. A single OOS violation is not uncommon. A pattern of them, or repeated inspection failures across a fleet, is a sign the operation is run loosely enough that violations keep recurring. This is context an authority check alone will never show you, and it’s often the most useful thing you’ll find in five minutes of looking.
- Insurance verification and profile identity confirmation: Both insurance status and profile confirmation carry enough detail to warrant their own sections, which follow.
How Do You Verify a Carrier’s Insurance Coverage?
Don’t take a certificate of insurance emailed by the carrier at face value. The carrier controls it, and it may reflect a policy that lapsed last week, was altered, or never covered the commodity you’re moving.
Verify coverage type, policy limits, and effective dates directly with the issuing insurer or its authorized agent. Checking directly with the insurer is the only way to know if coverage is active today. Note the date you verified it and who you spoke with, because you’ll need that note later.
What Identity and Fraud Red Flags Should Carrier-Brokers Watch For?
Three tactics account for most losses, and each one targets a different part of your check.
| Tactic | How It Works | What It Defeats |
|---|---|---|
| Carrier identity theft | Someone books freight while impersonating a legitimate carrier or broker, using a real MC number that checks out | Authority verification, since the number is genuine and the impersonation is not visible in SAFER |
| Double brokering | A load gets re-tendered to an unknown party without your knowledge, so the truck that shows up belongs to a carrier you never reviewed | The entire check, since the carrier you approved is not the carrier hauling |
| GPS and data spoofing | Tracking data misrepresents where the shipment is, which buys the thief hours before anyone starts looking | In-transit monitoring, since the load looks on schedule while it’s gone |
At the carrier-profile level, industry practitioners flag specific patterns that indicate fraud:
- A suite number that couldn’t physically hold the fleet size claimed
- A residential address tied to dozens of trucks
- Name and ownership changes that make history hard to trace
- The same vehicle appearing in inspection records under several different motor carrier names
Building a Documented Vetting Process That Holds Up in Litigation
Three documentation practices ensure your hiring decisions leave a record that holds up in court.
| Practice | What to Document | Why It Matters in Litigation |
|---|---|---|
| Written minimum approval criteria | Your hard-stop disqualifiers (no active authority, no insurer-verified coverage, coverage below your floor) and the conditions that require review, like a marginal BASIC score or authority issued inside the last six months | Gives every judgment call a standard it was measured against, so a decision reads as policy |
| Load-level exception records | Who approved the exception, what they reviewed, the reason, and the load number it applies to | Onboarding records show you approved a carrier once. Litigation asks about the load in question. |
| Pre-tender status recheck | The date and result of the authority, insurance, and safety check run immediately before the load was tendered | Closes the window between initial approval and the day the load moves, which is the first gap opposing counsel looks for |
Put those three together and you have the direct answer to the “reasonable policy” standard Kavanaugh described. A carrier-broker who can produce written criteria, show they were applied consistently across hundreds of loads, and point to the record for the load in dispute is arguing from evidence. An operation relying on what a dispatcher remembers walks into discovery with nothing to hand the jury but recollection.
Add Vetting Data to the Dispatch Workflow
Everything above assumes someone runs this check every time, even when a dispatcher has only eleven minutes to assign a truck to the load. When carrier compliance data sits in a separate portal or a spreadsheet a dispatcher has to remember to open, some loads don’t get checked, particularly where speed matters most. These are usually the riskiest loads.
Check for Disqualifiers at Dispatch
PCS Broker Compliance Management brings FMCSA authority, insurance status, and safety data into the dispatch screen where the load gets assigned. This allows dispatchers to review the carrier at the moment of the dispatch decision. Carrier-brokers set configurable warn or block thresholds that mirror their own written approval criteria. A disqualifier stops the tender, while a reviewable exception raises a warning the dispatcher has to clear before proceeding.
Once you put that in writing, PCS enforces it automatically. And because PCS runs asset dispatch, brokerage, and accounting on one platform, the same record covers the load whether you haul it yourself or tender it out. PCS also logs every carrier record change with before-and-after values and a timestamp. This provides the audit trail the litigation-readiness standard calls for, produced as a byproduct of the work dispatchers are already doing.
Set Up a Vetting Process That Survives Scrutiny
The process most carrier-brokers were running in 2024 was built for a different set of risks. The legal exposure changed and the theft numbers changed along with them. But there are three moves you can make this week to implement a vetting process that ensures you’re hiring a legitimate carrier:
- Write down your minimum carrier approval criteria and mark which items are hard stops.
- Start verifying insurance directly with insurers when an emailed certificate arrives.
- Add a status recheck immediately before tender.
PCS has been building trucking software since 1996, and PCS Broker Compliance Management puts carrier vetting inside the dispatch workflow. Book a demo to see how your compliance thresholds behave on a live tender.
Frequently asked questions
Authority, insurance, and safety status can all change between approval and the next load. The best practice is to check status immediately before every tender. Also, run a recurring recheck on a defined cadence, such as every 30 to 90 days, because an annual review will miss a lapse that happened in month three.
No. Active authority confirms a carrier is legally permitted to operate. It says nothing about safety history, claims record, or whether the entity using that authority is who it claims to be. Pair it with insurer-verified coverage and a safety data review.
Written minimum approval criteria applied consistently, load-level records showing who approved an exception and why, and proof that insurance was verified with the issuing insurer. Consistency is as important as content, since a policy nobody followed does more damage in discovery than no policy at all.
The ruling removed the FAAAA preemption defense for negligent-selection claims tied to motor vehicle safety. Cases that used to end at a motion to dismiss now proceed on the merits of the carrier’s vetting process.
