The US Supreme Court handed down a decision on May 14 that could really affect the competitive relationship of rail freight transportation vis a vis highway freight transportation. The decision was 9-0.
The case in question involved the liability of a freight broker for an injury accident involving a trucking company selected by the broker. Brokers function as transportation middlemen that help shippers looking for truckers find truckers looking for shippers. The brokers function to reduce what are known as “Search Costs.” They make it easier and cheaper to ship by truck. If they didn’t do these two things they wouldn’t be used.
The brokers were shielded from legal actions resulting from wrecks involving motor carriers. They could, and did, hire truckers with poor safety records without worrying about the financial downside of such actions if there was an injury or fatal accident. No more.
This can reasonably be projected to reduce the number of trucks and drivers operating in competition with rail freight service. This reduction in supply will then logically drive motor freight charges higher giving an advantage to rail freight movement. We shall see.
The Supreme Court just told every freight broker that they can be sued - FreightWaves