A friend of mine wanted to put a new roof on his house. It was leaking, and his plan was a hail-damage claim with his insurance provider.
I asked how old the roof was: 14 years. The warranty on a roof like his runs about 15, so the roof was already at the end of its life, and he was asking his insurer to buy him a new one.
He’d also been complaining that his premiums kept climbing. Multiply his claim by every homeowner retiring an old roof the same way, and the mystery of the rising premium solves itself. Everybody pays for the roof.
Transportation just got its version of that math.
A jury handed one of the industry’s largest brokers a $604 million verdict over how a carrier was selected. A company that pays a judgment like that recovers it in its rates. Its insurer recovers it across everyone’s premiums. And the carriers and brokers who never had a claim watch their own insurance climb anyway, the same way my relative’s neighbors will quietly pay for his shingles. It all goes up together.
I’ll tell you where liability actually sits in the conversations about the most critical topics we have with shippers: between fifth and tenth on the list. Everyone wants the protections. Nobody leads with them. What keeps people up is getting product on a truck and onto the shelf, and the market is making that harder by the quarter.
The headlines with the Montgomery case are doing their job; and this year’s industry cost reports put trucking’s operating costs at record levels. Spot rates have climbed with them, capacity continues to thin, and demand has stayed roughly flat.
In addition to the normal market fluctuations, the case set a precedent this industry has never had to price in, and you can hear this realization in conversations now: Uh-oh, there may be something there. Minds catch up to math eventually.
Play that math forward, and the carrier base changes shape. Compliance costs money, and at the low end of the market, those costs will likely run some operators out. The ones who survive will carry their own sets of requirements and protections.
The question I’d put to any of them is simple: Do these protections cover just you, or you and the shipper you’re working for?
So yes, RFPs should get more stringent, and they will. I challenge shippers to ask how rigorous a provider’s carrier-selection process actually is.
Ask what their compliance record looks like, and who checks it. Ask whether their protections safeguard your product, your brand, and your name. You’ll never get to 100% because exceptions happen. The job is stacking everything you can control toward it. And if you’re a shipper who isn’t doing that vetting today, take a hard look in the mirror, because nobody wants to carry this kind of liability unprotected.
KBX Logistics™ has had a head start on this one, building a disciplined carrier vetting process years before these headlines arrived. It runs in the background of every load, which is exactly where you want it: doing its job, so you can do yours.
The premiums are coming for the whole industry either way. The costs everyone creates, everyone shares. What you control is who touches your freight and how seriously they take protecting the name on the box.
From the seat: Ask whether a provider’s protections cover just them or them and you.
Next time: The freight nobody else wants. Hazmat, bulk, and oversized, and why the hard freight is the freight we like.
Annant Patel
Chief Commercial Officer & Asset Strategy Leader
KBX Logistics