Oil spikes to $120 on Iran news before settling near $106. Plus: another influencer shipment gets stolen, Wyoming can now pull your truck, 24 states sue over tariffs, and more.
The Supreme Court just heard arguments in the broker liability case we’ve been tracking. Plus: oil shipping costs explode, trucking insurance is stuck in 1980, regulators brace for a carrier crackdown, and more.
Optimize freight broker operations by fixing payment workflows in Q1. Streamline carrier pay before capacity shifts compress your margins.
"At issue is whether a broker be held liable for the negligence of a motor carrier." - Matthew Leffler, the Armchair Attorney
Good Friday morning. Today's newsletter brings you the latest developments in broker liability. Also featured are headlines about Walmart's drone delivery expansion in Dallas-Fort Worth, U.S. airstrikes on Yemen, and the impact of severe winter storms on freight. Plus, don't miss our insights on the dip in Port of New York and New Jersey traffic and the alarming rise in truck hijackings in Mexico.
🤔 Question of the Day: The Port of New York and New Jersey saw an ___% year-on-year decline in cargo volumes for November 2023. Scroll to our story in Around the Freight Web, to find the answer.
In today's email:
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🐔 WHAT’S COOKIN’ IN FREIGHT
🚁 Walmart Soars with DFW Drone Delivery Expansion. Walmart has significantly expanded its drone delivery service in Dallas-Fort Worth, reaching 1.8 million additional homes. This marks the largest drone delivery initiative by a U.S. retailer. The service, facilitated by Wing and Zipline, uses advanced drones approved for Beyond Visual Line of Sight operations. Customers can receive a wide range of products, including groceries and health items, in as little as 10 minutes. Over the past two years, Walmart has completed over 20,000 drone deliveries.
🚢 Red Sea Turbulence Escalates With U.S. Strikes. In response to Houthi attacks on cargo ships, the US, supported by allies, has launched airstrikes against Houthi rebel targets in Yemen. This move follows the more than 25 Houthi attacks on commercial ships in the region. The conflict has led to significant changes in shipping patterns, with a 30% year-on-year drop in Suez Canal traffic and a 40% revenue decline. Major freight companies continue to reroute, avoiding the Suez Canal and taking longer paths like the Cape of Good Hope. In manufacturing, Tesla plans to pause operations at its Berlin plant from Jan 29 to Feb 11 due to the attacks.
🌨️ Winter Storms Impact on Drivers and Freight. The US faces another round of severe winter storms, with the Midwest and East Coast particularly hard hit. WeatherOptics predicts heavy snowfall, with the Midwest expecting 6-12 inches and up to 2 feet in some areas. Cities like Chicago and Milwaukee brace for blizzard conditions. The East Coast anticipates strong winds of 35-50 mph, potentially causing power outages and damage. These conditions significantly impact road safety, as seen in the fatal pileup on Interstate 40 earlier this week. It also presents challenges for freight transport, with increased delays.
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The U.S. Supreme Court's choice not to re-examine the Ying Ye vs. GlobalTranz case marks a win for the freight brokerage sector while keeping the issue of broker liability open, as it upholds the lower court rulings favoring the industry.
Ying Ye filed a lawsuit after her husband was tragically killed in a 2017 accident in Texas. The crash involved a truck booked by GlobalTranz, a freight broker that hired carrier Global Sunrise.
Ye won a $10 million lawsuit against Global Sunrise but sought to include GlobalTranz in the lawsuit. GlobalTranz then urged the court to ignore the case --and that has gone their way.
The Federal District Court and the 7th Circuit Court of Appeals rejected Ye's claim, primarily citing the Federal Aviation Administration Authorization Act (FAAAA).
By declining to re-examine the case, the Supreme Court has left these broker-friendly decisions intact, which, for the time being, protects brokers from expanded liability in such situations.
This case echoes the Miller vs. C.H. Robinson case, where the 9th Circuit Court found that the broker was not protected by the FAAAA in a 2016 accident. However, in Ye's case, the Supreme Court's denial of certiorari leaves a jurisdictional split unresolved. The Miller precedent still holds sway in some jurisdictions, posing potential liability concerns for brokers.
The FAAAA includes a safety exemption, allowing state action for negligence with respect to motor vehicles. The interpretation of whether a brokerage can be considered a motor vehicle was central to Ye's case, with the court ultimately concluding that GlobalTranz wasn’t a motor vehicle and was thus protected by the FAAAA.
While the Ye case victory provides some relief, the unresolved nature of broker liability under federal law suggests that this issue will continue to evolve in lower courts.
Source: FreightWaves
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AROUND THE FREIGHT WEB
🚢 Port Numbers Plunge. The Port of New York and New Jersey saw an 11% year-on-year decline in cargo volumes for November, processing only 644,439 TEUs.
🚚 Mexican Truck Hijackings Surge. Mexico experienced a worrying 8% increase in truck hijackings from January to September 2023, totaling 6,030 incidents.
🚂 Maersk's Rail Detour. A.P. Moller-Maersk switches to freight rail to bypass the Panama Canal amid drought, utilizing the 47-mile Panama Canal Railway.
📉 Forward Air's Financial Falter. After a stock downgrade, Forward Air shares fall, hitting a multi-year low.
💸 Bankruptcy for Wise Choice. California's Wise Choice Trans. Corp. files for Chapter 7 bankruptcy, listing assets and liabilities between $1 million and $10 million.
⚠️ Dangerous Waters. Given issues in the Red Sea, FreightWaves highlights how peaceful seas are a relatively recent phenomenon.
FREIGHT CONFERENCES WE'RE ATTENDING
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FREIGHT MEME OF THE DAY
Also, check out:
Oil spikes to $120 on Iran news before settling near $106. Plus: another influencer shipment gets stolen, Wyoming can now pull your truck, 24 states sue over tariffs, and more.
The Supreme Court just heard arguments in the broker liability case we’ve been tracking. Plus: oil shipping costs explode, trucking insurance is stuck in 1980, regulators brace for a carrier crackdown, and more.
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