Regulations, liability, and best practices for 2026
The freight brokerage industry is in the middle of a regulatory transformation that has been building for years and is now accelerating on multiple fronts simultaneously. Court rulings have expanded the legal exposure that brokers face when carriers they select cause accidents. Proposed federal legislation would codify minimum vetting standards into law. And the FMCSA itself is overhauling its registration systems and enforcement mechanisms to close gaps that fraud operators have exploited for decades. For brokerages that have relied on informal vetting processes or minimal carrier checks, the window to modernize is closing.
The pressure is not coming from regulators alone. Shippers are increasingly requiring their broker partners to demonstrate documented carrier vetting processes as a condition of doing business. Insurance underwriters are asking more detailed questions about how brokerages select and monitor the carriers they dispatch. And plaintiffs attorneys, armed with a growing body of favorable case law, are filing more aggressive claims against brokers who cannot show that they applied reasonable care when selecting a carrier that later caused harm. The standard of care is not a fixed target. It is rising, and it is rising across every dimension that touches the broker-carrier relationship.
What makes 2026 a particularly significant year is the convergence of these forces. The Supreme Court is expected to rule on Montgomery v. Caribe Transport, a case that could establish a national standard for broker liability. The Kowalski Act and the SAFER Transport Act are both advancing through Congress. The FMCSA is rolling out its MOTUS registration system and continuing to crack down on CDL mills and chameleon carriers. Each of these developments individually would be noteworthy. Together, they represent a fundamental shift in the regulatory environment that every freight broker needs to understand and prepare for.
This guide provides a comprehensive overview of the regulations, court rulings, and legislative proposals that define the compliance landscape for freight brokers in 2026. It is written for brokerage owners, compliance managers, and operations leaders who need to understand not just what the rules are, but where they are heading and what practical steps they should be taking now to stay ahead of the curve.
The modern era of freight broker liability begins with a 2016 accident on a Nevada highway. A driver operating under the authority of a carrier dispatched by C.H. Robinson, one of the largest freight brokerages in the country, struck and killed a family in a multi-vehicle collision. The driver had a documented history of safety violations, and the estate of the victims filed suit against C.H. Robinson, alleging that the broker was negligent in selecting the carrier. The central legal question was whether the Federal Aviation Administration Authorization Act of 1994, known as the FAAAA, preempted the negligence claims against the broker. The FAAAA broadly prohibits states from enacting or enforcing laws related to the price, route, or service of a motor carrier or freight broker. C.H. Robinson argued that state-law negligence claims were precisely the kind of laws the FAAAA was designed to preempt.
The Ninth Circuit Court of Appeals disagreed. In its 2020 ruling, the court held that common-law negligence claims based on a broker's selection of a carrier fall within the FAAAA's safety exception. The statute explicitly preserves state authority over motor vehicle safety, and the court reasoned that a broker's decision about which carrier to assign to a load is fundamentally a safety decision. By choosing to hire a carrier with known safety deficiencies, the broker was not merely making a business decision about service. It was making a decision that directly affected the safety of other people on the road. The safety exception to the FAAAA, the court held, was designed to preserve exactly this kind of accountability.
C.H. Robinson petitioned the Supreme Court to review the case, but the Court declined to grant certiorari. That refusal left the Ninth Circuit's ruling intact, establishing a binding precedent across the western United States that brokers can be held liable for negligent carrier selection. The practical impact was immediate and far-reaching. Plaintiffs attorneys in states covered by the Ninth Circuit began including broker defendants as a standard practice in trucking accident litigation. Insurance carriers began adjusting their risk models and premium calculations for brokerages operating in those states. And brokers nationwide took notice, recognizing that even if the Ninth Circuit's ruling did not directly apply to them, the legal reasoning could easily be adopted by other circuit courts.
The full analysis of Miller v. C.H. Robinson examines the ruling in detail, including the specific facts that the court found most damning, the legal reasoning behind the safety exception, and the defensive measures that brokers should implement in response. The case remains the foundational precedent in this area of law, and every compliance program should be built with an understanding of what the court expected brokers to do and what C.H. Robinson failed to do.
While the Ninth Circuit's ruling in Miller established broker liability in the western states, other circuit courts reached different conclusions on the same question. The Third and Seventh Circuits held that the FAAAA does preempt state-law negligence claims against brokers, creating a direct conflict with the Ninth Circuit's position. This circuit split meant that a broker's legal exposure for negligent carrier selection depended entirely on the geographic jurisdiction where the accident occurred. The same brokerage, applying the same vetting process, dispatching the same carrier, could face liability in one state and be immune from suit in another.
That inconsistency is what ultimately brought the issue to the Supreme Court. In Montgomery v. Caribe Transport, the Court granted certiorari to resolve the circuit split and determine once and for all whether the FAAAA preempts state-law negligence claims against freight brokers for their carrier selection decisions. Oral arguments were heard on March 4, 2026, and a ruling is expected before the Court's term ends in late June or early July. The case has drawn enormous attention from the transportation industry, insurance carriers, trial lawyers, and safety advocates, all of whom recognize that the outcome will reshape the legal framework governing freight brokerage operations nationwide.
If the Court rules in favor of the plaintiffs and upholds the Ninth Circuit's approach, broker liability for negligent carrier selection would become the law of the land. Every brokerage in the country, regardless of size, would face potential tort liability when a carrier it selected is involved in an accident, if the broker failed to exercise reasonable care in the selection process. This would create strong financial incentives for brokers to invest in systematic vetting processes, maintain thorough documentation, and apply consistent selection criteria. Insurance premiums would likely increase across the industry, but brokerages that can demonstrate robust compliance programs would be in a better position to negotiate favorable rates and defend against claims.
If the Court rules in favor of the brokers and holds that the FAAAA does preempt these claims, the immediate legal pressure would ease considerably. However, industry observers widely expect that such a ruling would accelerate the push for federal legislation explicitly establishing broker liability standards. The Kowalski Act, already under consideration, would fill exactly this gap. In either scenario, the direction of travel is clear: brokers will be held to a higher standard for carrier selection, whether through court-imposed tort liability or legislatively mandated compliance requirements. The brokerages that begin building their compliance infrastructure now will be prepared regardless of which path the law takes.
The Kowalski Act, formally titled the Broker Transparency and Accountability in Freight Act, is named after the family of a victim killed in a crash involving a carrier with a history of safety violations that was dispatched by a broker who performed no meaningful vetting. The legislation was introduced in response to a pattern of cases in which brokers selected carriers with documented safety problems, victims or their families sought to hold the brokers accountable, and courts in some jurisdictions dismissed the claims on FAAAA preemption grounds. The Act's sponsors argue that the existing legal framework creates a perverse incentive: brokers can profit from selecting the cheapest available carriers, regardless of safety records, without facing legal consequences in many states because federal preemption shields them from accountability.
At its core, the Kowalski Act would establish a federal duty of care for freight brokers in carrier selection. It would require brokers to verify, at minimum, that a carrier has active operating authority, a satisfactory safety rating or no rating at all with a clean inspection history, valid and adequate insurance coverage, and no active out-of-service orders. Beyond these baseline requirements, the Act would mandate that brokers maintain a written carrier selection policy, apply their selection criteria consistently across all carrier engagements, and document the vetting process for each load assignment. The documentation requirement is particularly significant. It would mean that in the event of an accident, a broker would need to produce records showing what data it reviewed, what criteria it applied, and what the outcome of the vetting process was for the specific carrier involved.
For large brokerages with established compliance departments, the Kowalski Act's requirements would largely formalize practices they already follow. The impact would be most significant for small and mid-sized brokerages that have relied on informal vetting processes, personal relationships, or minimal checks. These operations would need to invest in systems and processes that can reliably verify carrier qualifications, apply consistent criteria, and maintain the documentation trail that the law would require. The cost of compliance would be real, but proponents argue that it is far less than the societal cost of preventable accidents caused by unvetted carriers.
Our detailed breakdown of the Kowalski Act covers the specific provisions of the legislation, the compliance timeline if enacted, and practical steps that brokerages of all sizes can take to prepare. Whether or not the Act passes in its current form, the requirements it outlines represent the direction in which industry standards are moving. Building your vetting process around these standards now means you will not be scrambling to retrofit compliance later.
While the Kowalski Act focuses on broker liability and vetting standards, the Strengthening Authority for Federal Enforcement and Registration (SAFER) Transport Act targets the systemic fraud that has plagued the freight industry for years. The legislation addresses the structural weaknesses in the FMCSA's registration and oversight systems that have allowed bad actors to operate with impunity, cycling through identities, evading enforcement actions, and exploiting gaps in data sharing between federal and state agencies.
The most consequential provision of the SAFER Transport Act is the phase-out of the MC number system in favor of a unified USDOT number-based registration framework. The current dual-number system, in which carriers hold both a DOT number and an MC number, creates confusion and enables fraud. Carriers have been known to obtain new MC numbers to escape enforcement histories tied to their previous authority, a practice sometimes called "chameleon carrier" reincarnation. By consolidating registration under a single USDOT identifier, the Act would make it significantly harder for carriers to shed their enforcement history by simply applying for a new number.
The Act also introduces mandatory ownership change notifications. When a carrier undergoes a change in control, whether through sale, merger, or restructuring, the new owner would be required to notify the FMCSA within a specified timeframe. This closes a loophole that chameleon carriers have exploited by transferring authority to new entities controlled by the same individuals. Additional provisions include automated fraud detection systems within the FMCSA's registration process, registration requirements for foreign dispatch services operating in the U.S. freight market, and CDL integrity provisions aimed at preventing fraudulent commercial driver's license issuance. Together, these measures represent the most comprehensive anti-fraud legislation the freight industry has seen in decades.
For freight brokers, the SAFER Transport Act matters because it directly affects the reliability of the data they use to vet carriers. When the FMCSA's registration systems are porous and easily gamed, even a diligent broker faces the risk of dispatching a carrier whose authority appears clean but whose principals have a history of safety violations under previous identities. By strengthening the integrity of the underlying registration data, the SAFER Transport Act would make broker vetting processes more effective. Our guide on what small brokers need to know about the SAFER Transport Act examines each provision and its practical implications for brokerage operations.
Beyond the legislative proposals working their way through Congress, the FMCSA itself has been expanding its enforcement capabilities and closing the gaps that fraud operators have historically exploited. The most visible initiative is the rollout of the MOTUS registration system, which replaces the aging Unified Registration System and introduces modernized identity verification, streamlined application processing, and enhanced data validation for new carrier registrations. MOTUS represents a fundamental upgrade to the infrastructure that supports carrier oversight, and while the full rollout has faced delays, the system is progressively being deployed and will eventually become the primary registration platform for all FMCSA-regulated entities.
The agency's crackdown on CDL mills has been one of the most aggressive enforcement campaigns in recent memory. Since 2022, the FMCSA has removed over 7,000 commercial driver training schools from its registry, many of which were issuing certifications to drivers who had not completed the required training. In some cases, these schools were issuing fraudulent certificates to drivers who could not read English, had no meaningful behind-the-wheel training, or had disqualifying medical conditions that were overlooked or concealed. The downstream safety implications were severe: unqualified drivers operating heavy commercial vehicles on public highways, often dispatched by carriers and brokers who had no way of knowing that their CDL credentials were obtained through fraud.
Chameleon carrier enforcement has also intensified. The FMCSA has improved its ability to detect carriers that shut down one authority and reopen under a new identity to escape enforcement history. By cross-referencing ownership records, addresses, insurance agents, and other identifiers, the agency can now flag new applications that share characteristics with recently shut-down carriers. While the detection is not perfect, it represents a meaningful improvement over the previous state of affairs, where chameleon carriers operated with relative impunity. ELD enforcement has similarly tightened, with the agency revoking registrations for non-compliant electronic logging devices and increasing roadside inspections that verify ELD data integrity.
The broader trend is unmistakable: the gap between regulation and enforcement is closing. Historically, the freight industry had extensive regulations on the books but limited enforcement resources, which meant that bad actors could operate for extended periods before facing consequences. That dynamic is changing. Automated systems, improved data sharing between agencies, and increased congressional attention to freight safety are all contributing to a more effective enforcement environment. For brokers, this means that the carriers you dispatch are more likely to be caught if they are cutting corners, and your own vetting practices are more likely to be scrutinized if something goes wrong.
Given the regulatory trajectory outlined above, every freight brokerage needs a carrier vetting process that meets the rising standard of care. The minimum viable vetting process for 2026 should include verification of active operating authority, confirmation of adequate insurance coverage, review of the carrier's safety record including inspection and crash history, checking for active out-of-service orders, and verification that the carrier's authority has not been recently issued or recently transferred. These are the baseline checks. A brokerage that cannot demonstrate it performed these steps for every carrier it dispatches is exposed, both legally and operationally.
Beyond the minimum, best practice in 2026 means applying written criteria consistently across all carrier selections. Having a documented carrier selection policy is not just a legal shield. It is an operational discipline that prevents the kind of ad hoc decision-making that leads to bad outcomes. Your policy should define what data points you check, what thresholds trigger rejection or escalation, who has authority to override the standard criteria, and how overrides are documented. The policy does not need to be rigid. Brokerages deal with diverse freight types, lane requirements, and capacity constraints that may require flexibility. But the flexibility should be structured and documented, not arbitrary.
Multi-factor verification is another critical element of a modern vetting process. Checking authority status alone is not sufficient. Sophisticated fraud operators maintain active authority, valid insurance, and clean SAFER pages while running illegal operations behind the scenes. A robust vetting process looks at multiple data points in combination: authority age, insurance history, inspection frequency and outcomes, equipment records, address verification, and identity confirmation. When these signals are evaluated together, patterns emerge that would not be visible from any single data point in isolation.
Finally, the distinction between one-time vetting and continuous monitoring is becoming increasingly important. A carrier that was fully compliant when you first vetted it may have had its insurance lapse, received an out-of-service order, or undergone an ownership change since then. Continuous monitoring means receiving alerts when the status of a carrier in your network changes, so you can take action before dispatching a load to a carrier that is no longer qualified. Digital onboarding workflows that capture vetting data at the point of carrier registration and maintain ongoing monitoring after onboarding are becoming the industry standard. The days of checking a carrier once and filing the paperwork in a drawer are over.
If the regulatory and legal landscape tells you what to do, the documentation requirements tell you how to prove you did it. In litigation, regulatory audits, and insurance reviews, the question is never simply whether you vetted a carrier. It is whether you can demonstrate, with contemporaneous records, exactly what steps you took, what data you reviewed, what criteria you applied, and what decision you reached. The absence of documentation is treated, in most legal contexts, as the absence of the action itself. If you checked a carrier's safety record but did not record what you found, you may as well not have checked at all.
The essential documentation elements for a compliant vetting process include: the date and time of the vetting decision, the identity of the person or system that performed the vetting, the specific data sources consulted and the data retrieved, the criteria applied to evaluate the carrier, the outcome of the evaluation (approved, rejected, or approved with conditions), and the rationale for any overrides of standard criteria. If a carrier was flagged by your system but a dispatcher overrode the flag and dispatched the load anyway, you need a record of who made that decision, why they made it, and what additional information they relied on. Override decisions without documented rationale are among the most damaging pieces of evidence in negligent selection litigation.
Retention periods for vetting documentation should be informed by the applicable statute of limitations for negligence claims in the jurisdictions where you operate, which in many states is two to three years from the date of an accident but can extend significantly in cases involving wrongful death or claims by minors. A conservative approach is to retain all carrier vetting records for at least five years, and longer for carriers that were involved in incidents or flagged during the vetting process. Many brokerages retain records indefinitely, as the cost of digital storage is negligible compared to the cost of being unable to produce records when they are needed.
One of the underappreciated advantages of automated vetting platforms is that they create documentation as a natural byproduct of the vetting workflow. When a carrier is vetted through a digital system, the system automatically records what data was retrieved, when it was retrieved, what criteria were applied, and what the outcome was. There is no additional documentation burden on the dispatcher or compliance team because the audit trail is built into the process itself. This is a fundamental advantage over manual vetting processes, where documentation depends on human discipline and is inevitably inconsistent. In a legal or regulatory review, the difference between a brokerage that can produce a complete, timestamped audit trail and one that cannot is often the difference between a defensible position and a costly settlement.
The financial exposure from inadequate carrier vetting is not theoretical. It is quantifiable and growing. Jury verdicts in trucking accident cases have been escalating for years, driven by what the insurance industry calls "nuclear verdicts" and "social inflation." Verdicts exceeding $10 million are no longer unusual, and verdicts exceeding $100 million have been recorded in multiple jurisdictions. When a broker is named as a defendant in such cases, the potential exposure is catastrophic. Even cases that settle before trial often result in multi-million dollar payments, and the legal costs of defending a negligent selection claim through trial can exceed $500,000 regardless of the outcome.
Beyond direct litigation exposure, the costs of non-compliance manifest in several other ways. Insurance premiums for freight brokerages have been rising steadily, and underwriters are increasingly differentiating between brokerages based on their vetting practices. A brokerage that can demonstrate a systematic, documented carrier selection process will typically receive more favorable rates than one that cannot. The difference can be substantial: industry sources report premium differentials of 15-30% between brokerages with strong vetting programs and those without. Over time, this premium differential alone can exceed the cost of implementing a modern vetting platform.
Regulatory fines are another dimension of exposure. While the FMCSA does not currently impose direct penalties on brokers for inadequate vetting, this could change under the Kowalski Act or similar legislation. State regulators in some jurisdictions have already begun investigating broker practices in the wake of serious accidents. And even without direct regulatory penalties, brokers who dispatch carriers that are later found to be operating illegally can face scrutiny from the FMCSA, the DOT's Office of Inspector General, and state attorneys general.
Perhaps the most significant long-term cost is reputational damage and loss of shipper relationships. Shippers are increasingly sophisticated about freight risk management, and a broker that is publicly associated with a serious accident involving a poorly vetted carrier will face difficult conversations with its existing customer base and an even harder time winning new business. In an industry built on trust and relationships, the reputational consequences of a compliance failure can persist long after the legal and financial costs have been absorbed. Our analysis of the real cost of not vetting carriers quantifies these exposures and makes the business case for investment in compliant vetting infrastructure.
VettaVerify was built for exactly this regulatory moment. The platform automates the carrier vetting process that courts, legislators, and regulators are converging on as the minimum standard of care. Every carrier lookup pulls real-time data from the FMCSA, cross-references authority status, insurance coverage, safety history, inspection records, and equipment data, and produces a composite VettaScore that reflects the carrier's overall risk profile. The vetting criteria are applied consistently to every carrier, every time, eliminating the variability that comes with manual processes and ad hoc decision-making.
More importantly, VettaVerify creates the documentation trail that makes your compliance program defensible. Every carrier lookup, every vetting decision, every data point reviewed is timestamped and stored. If you need to demonstrate what you knew about a carrier at the time you dispatched a load, the record is there. If a regulator asks to see your carrier selection criteria and how they are applied, the system produces the answer. If a plaintiffs attorney demands your vetting records in discovery, you can produce a complete, contemporaneous audit trail that shows exactly what steps you took. The platform does not just help you vet carriers. It helps you prove that you vetted them, which is what the evolving legal and regulatory landscape increasingly demands.
Whether the Supreme Court expands broker liability nationwide in Montgomery, or Congress passes the Kowalski Act, or the SAFER Transport Act reshapes the registration landscape, the brokerages that will be best positioned are those that already have a systematic, documented, and defensible carrier vetting process in place. VettaVerify provides that process out of the box, so you can focus on moving freight while the platform handles the compliance infrastructure that the industry increasingly requires.
The Ninth Circuit ruling that established broker liability for negligent carrier selection — and the Supreme Court case that could make it national.
What the proposed federal broker liability legislation actually says and how to prepare.
The most comprehensive freight fraud legislation in years and its impact on carrier vetting.
What skipping carrier vetting actually costs in dollars, regulatory exposure, and reputational damage.
The methodology behind VettaScore — what data goes into the composite risk rating and how brokers use it.