If your business ships anything - products to customers, materials from suppliers, inventory between locations - a Supreme Court ruling last week quietly made your costs go up.
On May 14th, the U.S. Supreme Court issued its decision in Shawn Montgomery v. Caribe Transport II, LLC. The ruling expanded the ability of individuals to sue freight brokers under state law when a contracted trucking company causes an accident or injury.
It sounds like a legal technicality. It isn't.
What freight brokers actually do
When a business ships something, it usually doesn't deal directly with the truck driver. It works with a freight broker - a middleman who finds carriers, coordinates logistics, and books the shipment. Freight brokers connect hundreds of thousands of small shippers (including small businesses) with carriers every day.
Before this ruling, federal law - specifically the Federal Aviation Administration Authorization Act of 1994 - largely shielded freight brokers from state lawsuits over the actions of the carriers they booked. There was a uniform national standard.
That standard just went away.
What the Court decided
The Court ruled that freight brokers can now be held liable under state law for a motor carrier's negligent hiring decisions. In plain terms: if a freight broker books a carrier, and that carrier's driver causes an accident because the carrier had a bad safety record, the broker can be sued.
The Court split on the reasoning, but the effect is clear: each state can now set its own standard for when and how brokers can be sued.
Why this matters for your shipping costs
NFIB filed an amicus brief in the case arguing the opposite outcome, warning that expanded broker liability would ripple through the entire supply chain. They lost.
"Without a uniform standard, every small business who uses a trucking company will be hit with higher costs and reduced availability as the resulting patchwork of rules and risk ricochets through the supply chain," said Beth Milito, Vice President and Executive Director of NFIB's Small Business Legal Center.
Here's the transmission mechanism: freight brokers now face unpredictable lawsuit exposure that varies by state. To protect themselves, they will do one or more of the following:
- Raise their service fees to cover legal risk and higher insurance premiums
- Become more selective about which carriers they book - avoiding smaller or newer carriers to reduce liability exposure, which reduces carrier competition and pushes rates up
- Exit markets in states where liability is highest, reducing shipping options in those states
The businesses that feel this most are not Amazon or Walmart - they have logistics operations that bypass brokers entirely. The businesses that feel it are the ones moving pallets of product through third-party brokers: small manufacturers, e-commerce sellers, restaurant supply distributors, home goods retailers.
How fast will this play out?
Not overnight. The ruling creates the legal exposure; the costs come as insurance adjustments, broker contract renegotiations, and rate increases work through the market over the next 6-18 months.
Businesses operating in multiple states should watch for inconsistent shipping quotes and terms as brokers begin pricing state-specific legal risk. Businesses in states known for plaintiff-friendly courts - California, Illinois, New York - may see broker fees and carrier availability shift faster.
What to do now
If you ship regularly, the practical moves are:
Lock in contracts. If you have a volume relationship with a freight broker, this is a good time to lock in rates or terms before the market reprices risk. Spot rates are typically more volatile than contract rates.
Diversify your broker relationships. One broker going selective or exiting your state is a problem if you rely on them exclusively. Having two or three reliable relationships gives you options.
Ask about carrier vetting. Some freight brokers will differentiate themselves by advertising rigorous carrier screening as a way to reduce their liability exposure. That's actually good for you - it means fewer shipment disasters.
Watch your per-unit shipping costs. Set a baseline now. If your shipping costs climb 8-15% over the next 12 months without a fuel price spike to explain it, this ruling is likely a contributing factor.
Source: NFIB press release, "Supreme Court Declines to Protect Shipping Industry," May 14, 2026 - read the full release. Supreme Court opinion: Montgomery v. Caribe Transport II, LLC.