Key Legal and Operational Risks Facing the Transportation Industry

Supreme Court Review of Freight Broker Liability Creates Litigation Risk

A pivotal legal development involves the U.S. Supreme Court’s review of Montgomery v. Caribe Transport II, LLC, a case arising from a serious truck crash in which the plaintiff sued not only the motor carrier and driver, but also freight broker C.H. Robinson. In the lower courts, Montgomery alleged that C.H. Robinson negligently selected the carrier and should be held liable under state tort law for the resulting injuries. The Seventh Circuit rejected those claims, holding that the Federal Aviation Administration Authorization Act (F4A) broadly preempts negligent-selection suits against brokers and finding no agency relationship sufficient to support vicarious liability. C.H. Robinson has now filed its merits brief urging the Supreme Court to affirm that result and to confirm that broker “services,” including carrier selection, are shielded from state-law negligence claims by F4A’s preemption provision.

At the heart of the case is the scope of F4A’s “safety exception” language that preserves a state’s “safety regulatory authority… with respect to motor vehicles.” Montgomery and supporting amici argue that common-law negligence claims against brokers fall within that exception because they are a traditional vehicle for enforcing roadway safety. C.H. Robinson and its allies contend that the exception is aimed at direct state regulation, such as licensing and equipment rules, rather than private tort suits targeting how brokers provide their services. They warn that allowing such claims would create a patchwork of state-by-state liability standards for a nationally regulated industry. The case also sits against a clear circuit split, with the Ninth Circuit allowing negligent-selection claims against brokers under the safety exception, while the Seventh Circuit has held such claims preempted.

For freight forwarders, brokers, and their customers, the eventual ruling will materially reshape the risk landscape. A decision affirming broad preemption would reduce exposure to state-law negligent-selection suits and may support more uniform, federally anchored risk allocation in broker-carrier and broker-shipper contracts, insurance programs, and indemnity structures. A decision going the other way, permitting these claims under the safety exception, would likely spur increased plaintiff litigation against brokers, drive demand for stricter carrier-vetting protocols and documentation, and push firms to negotiate stronger contractual protections and higher insurance and safety standards from their carrier partners.

The Supreme Court will hear oral argument on March 4, 2026.

Wave of Logistics Bankruptcies Continues as Layoffs Spread

The freight downturn continues to ripple through the sector with high-profile insolvencies. STG Logistics, a major U.S. intermodal and logistics provider that previously acquired XPO’s North American intermodal business, filed for voluntary Chapter 11 protection on January 12 in the District of New Jersey. Public reports indicate the company is operating as a debtor-in-possession with court-approved access to a disputed $150 million financing facility, while listing an estimated $1–10 billion in both assets and liabilities.

On January 16, Texas International Enterprises, a large cross-border trucking company based in Laredo, Texas, likewise filed for Chapter 11. Court and industry summaries state the carrier operates approximately 280 power units, 1,500 trailers, and employs roughly 600 drivers, logging more than 39 million miles in 2024. The company reportedly lists $10–50 million in assets and liabilities, has more than 200 creditors, and expects unsecured creditors may receive little or no recovery after administrative expenses. While the company continues operating, there is no clear public roadmap yet for restructuring or asset sales.

Separate reporting from early January documents a broader pattern across the industry, with more than 2,200 workers affected by layoffs, restructurings, and bankruptcies spanning rail-support services, parcel networks, last-mile delivery partners, warehouse-linked logistics providers, and manufacturing-adjacent operations.

For freight forwarders, brokers, and warehouse operators, this combination of carrier bankruptcies and layoffs creates contract and litigation risk on multiple fronts. These risks include cargo potentially stranded with insolvent carriers, disputes over unpaid freight, detention, or warehousing charges, exposure to preference and clawback claims for payments received before a carrier’s bankruptcy filing, and the operational scramble to cover capacity on short notice. Practical risk-management steps include closely monitoring the financial health of key carriers, diversifying carrier portfolios, tightening credit terms, and incorporating explicit insolvency and termination provisions into transportation, brokerage, and warehousing contracts. These provisions may include rights to withhold performance or re-tender freight if a carrier shows signs of financial distress.

Strategic and Cyber-Enabled Cargo Theft Emerges as a Top Transportation Risk

A January 12 analysis of “strategic cargo theft” highlights how criminal groups are increasingly relying on stolen online identities, spoofed carrier profiles, and sophisticated social engineering to redirect loads, often without any physical attack on equipment. Thieves pose as legitimate carriers or brokers, manipulate dispatch communications, and arrange for high-value loads to be tendered to them or released under false credentials at warehouses and cross-docks.

These developments mirror late-2025 industry data showing that total U.S. and Canadian cargo theft exceeded 90 percent growth compared to 2021 levels, while high-tech or “strategic” theft incidents increased by approximately 1,500 percent over the same period. Additional warnings appear in a 2026 cybersecurity trends report from the trucking industry, which emphasizes the rise of cyber-enabled cargo theft through attacks on transportation management systems, load boards, and email accounts to harvest credentials and shipment details.

For freight brokers, forwarders, and warehouse operators, the resulting legal exposure runs in multiple directions. A broker whose credentials are hijacked could face allegations of negligent cybersecurity practices or negligent carrier selection if cargo disappears after a spoofed tender. A warehouse or cross-dock that releases freight to a fraudulent driver without robust verification procedures may be accused of failing to follow reasonable security protocols. Carriers face not only direct losses of equipment and cargo, but also reputational harm when their identities are repeatedly used in fraud schemes. Insurance markets are increasingly scrutinizing whether insureds maintained adequate cyber and physical controls before paying large theft claims.

Mitigation now requires procedural and technical safeguards rather than reliance on physical security alone. Multi-factor authentication for transportation management systems and load boards, call-back verification to known contacts before changes to banking or routing instructions, strict photo identification and pickup-number protocols at warehouses, and documented security procedures for releasing freight are becoming essential across the supply chain. For clients, having written and consistently enforced procedures can serve as a critical evidentiary shield in later disputes over responsibility for lost or stolen cargo.