THE DAILY

Monday, June 1, 2026

The five minutes that makes you the most informed person in freight today

The Daily

Supreme Court rules brokers can be sued for carrier safety selection, and C.H. Robinson is already responding

The largest freight broker in North America started pulling carriers from its load board two weeks after a unanimous Supreme Court ruling dismantled the legal shield the brokerage industry had used for years to defeat negligent hiring claims. The timing doesn’t require much interpretation.

On May 14, the Supreme Court ruled 9-0 in Montgomery v. Caribe Transport II, LLC that state-law negligent selection claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act. Justice Amy Coney Barrett wrote the opinion; Justices Kavanaugh and Alito concurred. There was no dissent. The case grew from a 2017 crash on Interstate 70 in Illinois. A tractor-trailer operated by Caribe Transport II veered off the road and struck Shawn Montgomery’s vehicle on the shoulder, costing him his leg. Montgomery sued C.H. Robinson for negligently selecting Caribe Transport, citing the carrier’s conditional FMCSA safety rating and documented deficiencies in driver qualification, hours of service, vehicle maintenance, and crash rate.

For years, brokers defeated claims like Montgomery’s on a single argument: FAAAA preemption. The statute bars state laws “related to a price, route, or service” of a broker, and lower courts had agreed that negligent selection claims fell under that bar. Barrett’s reasoning cut through the legal architecture in two moves. The FAAAA contains a safety exception that preserves state authority over motor vehicles, and requiring a broker to exercise ordinary care in carrier selection “concerns motor vehicles,” Barrett wrote — specifically, the trucks that carry the goods. That puts negligent hiring inside the safety exception, which saves it from preemption. Legal analysts described the core reasoning as fitting “on a napkin.” The preemption shield that brokers had relied on since the 1990s collapsed in a unanimous decision.

The practical aftermath arrived inside C.H. Robinson’s carrier network within days. Notices branded under the company have been circulating, telling carriers their accounts were moved to non-certified status because their FMCSA BASIC scores exceed the broker’s internal threshold. Load board access cuts off immediately; freight in transit delivers normally, and existing payables process in full. The criterion cited in the notice is FMCSA BASIC data — the same data a plaintiff would introduce to argue a broker made a negligent selection. C.H. Robinson has not publicly connected the policy to the Supreme Court ruling, but the sequence is direct: two weeks after a 9-0 decision held that brokers can be sued for selecting carriers with poor safety scores, the largest broker in North America began removing them from its board.

The impact isn’t falling evenly. A carrier with a clean out-of-service record can still exceed a broker’s commercial threshold because BASIC scores draw on seven categories — unsafe driving, hours-of-service compliance, driver fitness, controlled substances, vehicle maintenance, hazardous materials, and crash indicator. One carrier active on social media reported a clean OOS and violation record and still lost board access. The threshold for what a broker will accept appears to be tightening across the full scoring model, not just on out-of-service violations. For carriers on the right side of the new line, reduced competition for broker freight is a clear opportunity. For those on the wrong side, the path back runs through clean inspections accumulating over CSA’s 24-month rolling window and DataQ challenges for any violations that can be legitimately contested.

So What? The decision permanently changes the commercial value of a clean FMCSA safety profile. Before May 14, a broker’s legal risk on carrier selection was largely contained by preemption — negligent hiring claims got dismissed early. That containment is gone, and every broker now has a financial incentive to tighten carrier acceptance thresholds. C.H. Robinson’s carrier notice is likely the first visible wave of a broader industry repricing. Carriers should pull their BASIC scores today and understand where they stand across all seven categories. Shippers should expect the available carrier pool inside their brokers’ networks to narrow as that repricing works through the system.

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Top Stories

Over 3,000 Mexican truck drivers lose U.S. visas as DOT-CBP data sharing tightens cabotage enforcement

More than 3,000 Mexican commercial drivers have had their U.S. visas revoked in recent months as federal authorities enforce cabotage rules through a newly integrated DOT-CBP data system. The merge allows CBP to automatically flag and revoke visas for drivers previously cited for transporting freight between two domestic U.S. points without authorization. Pedro Lozano Martínez, president of the Nuevo Laredo Freight Carriers Association and a delegate of Mexico’s CANACAR, said many drivers don’t learn their visa has been pulled until they reach the border crossing. The Otay Mesa Chamber of Commerce warned the enforcement sweep now reaches back several years to prior violations, reducing the cross-border driver pool and pushing costs higher.

So What? Cross-border shippers on the U.S.-Mexico corridor should expect tighter driver supply at major gateways, particularly Otay Mesa and Nuevo Laredo. Fewer eligible drivers means longer waits and higher rates on northbound lanes. If you haven’t reviewed your carrier partners’ cross-border driver compliance posture, this enforcement wave is the signal to do it.

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STB conditionally accepts UP-NS merger application, requests supplemental data by July 27

The Surface Transportation Board avoided what would have been a historic first — a second outright rejection of a merger application — when it conditionally accepted the Union Pacific-Norfolk Southern proposal and demanded supplemental data by July 27. Markets responded by erasing roughly $7.5 billion in combined market cap, about 10% of the deal’s estimated $85 billion value. The delay pushes formal evaluation to after the July submission, but the application itself remains live. Per FreightWaves rail writer Stuart Chirls, industry observers expect UP and NS will need to offer significant concessions well beyond what the current filing contains: “Whatever they’re offering in the application are just table stakes before the STB gets down to brass tacks,” Chirls wrote. A supplier already planning for NS to divest up to 15,000 miles of track — more than half the network — puts the scale of potential concessions in perspective.

So What? July 27 is the next real decision point. Watch what data the STB specifically requests — that will reveal where the board sees the biggest competitive risk. If the track divestiture figure circulating among suppliers proves accurate, the post-merger network will look dramatically different from what UP and NS have publicly described.

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Nussbaum Transportation raises driver pay; industry data suggests others are already following

Illinois-based Nussbaum Transportation announced its second driver pay increase in two months — the first publicly disclosed — raising OTR pay 3 to 5 cents per mile, boosting weekly minimum guarantees by $50 to $100, and adding the company’s first driver profit-sharing plan, projected to average 2 cents per mile annually with upside in strong years. Nussbaum recruiting director Joseph Anderson said the announcement immediately drew a call from a peer carrier confirming it had also raised pay without disclosing it. Leah Shaver of the National Transportation Institute said fleets have reported “a conservative number” of pay increases over the past four weeks, focused on base pay and over-the-road transition packages. Ryder CEO John Diez told investors this month that improving freight conditions will drive higher driver costs: “You’re going to see it on the driver side with turnover and activity moving up.”

So What? When the first public pay announcement triggers a call from a competitor who already moved without saying so, that’s a market signal. Driver compensation is rising ahead of broad disclosure. Shippers and 3PLs building second-half cost models should treat higher driver pay as a structural input, not a tail risk.

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China manufacturing PMI falls to exactly 50.0% in May as new orders slip below expansion threshold

China’s official manufacturing PMI landed at 50.0% in May, down 0.3 percentage points from April and sitting exactly at the boundary between expansion and contraction. The headline masks a sharper split: large enterprises held at 51.1% while medium and small manufacturers dropped to 48.6% and 48.5% respectively, both clearly contracting. Of the five sub-indices, only production held above 50. New orders fell to 49.9%, raw materials inventory to 48.6%, employment to 48.6%, and supplier delivery times to 49.2% — all signaling deteriorating conditions. Inflationary pressure from the Strait of Hormuz conflict has kept China’s Purchase Price Index elevated at 60.5% in May after spiking to 63.9% in March following the outbreak of the Iran war.

So What? A PMI of exactly 50.0 isn’t contraction yet, but four of five sub-indices below 50 — including new orders — is the leading edge of one. Small and medium manufacturers are already contracting. For supply chain planners watching China export volumes, this reading combined with elevated raw material costs and weakening demand suggests front-loaded U.S. import activity may have pulled forward demand that won’t replenish on the same schedule.

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Today’s Lineup:
Webb Estes, President and COO, Estes Express Lines — 12:15pm ET
Michael Caney, CCO, Highway — 12:35pm ET
Shelley Simpson, President and CEO, JB Hunt — 1:00pm ET
Eugene Seroka, Executive Director of the Port of Los Angeles — 1:30pm ET

From Our Library

From Our Partners

What We’re Watching

▸ Whether other major brokers follow C.H. Robinson’s safety threshold tightening. Montgomery v. Caribe applies to every freight broker equally. C.H. Robinson’s carrier eligibility notice is the first public signal. Watch for similar policy moves from other top brokerages over the next 30 to 60 days — and watch how those decisions reshape capacity availability on key lanes.

▸ What the STB actually requests from UP and NS on July 27. The specific data demands will reveal where the board sees the biggest competitive risk in the proposed transcontinental merger. The 15,000-mile potential track divestiture circulating among industry suppliers hasn’t been publicly confirmed — the July submission could force the number into the open.

▸ June China manufacturing PMI. With new orders already below 50 and small and medium manufacturers contracting, the question is whether demand deteriorates further in June. A second consecutive sub-50 reading on new orders would confirm the front-loaded U.S. import surge drew down demand that isn’t rebuilding at the same pace.

That’s your Daily for today. See you tomorrow.

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