If you’re a broker, you’ve probably heard of the infamous Schram case.  It was the first case of its kind where a freight broker was held liable for negligent hiring of a motor carrier that was involved in a catastrophic loss.  Because reducing broker risk is a critical piece of our CarrierWatch^SM product, we wanted to give you an exclusive behind the scenes analysis of the Schram case from one of the nation’s leading experts in transportation law, Ron Usem, a well-known transportation industry attorney and member of the TIA Directors Circle.

Ron agreed to a lengthy phone interview session out of which we produced as a series of nine highly informative podcasts. 

We'll post the next four parts in a subsequent post.

Here are some insights and guidance Ron provides throughout the podcasts:

• Just because the Schram case involved a large broker with deep pockets, don’t make the mistake of thinking as a small broker you will not be hit with a liability suite if a carrier you engage is negligent
• Ron outlines a case that might've been construed as negligent hiring if the broker hadn't had his ducks in a row.  The broker hired a carrier after checking their insurance, operating authority and safety rating.  The driver fell asleep at the wheel and a fatal accident resulted.  But, in this case, the broker was not liable as due diligence could be demonstrated, and court ruled the broker could not control the drive behind the wheel
• Establish your own operating procedures for approving carriers and document them.  If an injury occurs due to the performance of a hired carrier you can show you exercised reasonable care
• Take the extra step to ensure a carrier has valid insurance.  In the third podcast Ron describes the daunting problem of bogus insurance certificates, and suggests brokers validate the carrier’s insurance by contacting the agent.
• In podcast 5 Ron addresses the confusion about brokers having to take responsibility for cargo losses not covered adequately by the carrier’s policy.  Here Ron describes “contingent cargo insurance” options for brokers.
• Ron issues a warning in Podcast 7 regarding the practice of brokers wanting to be additionally insured on a carrier’s policy.
• In podcast 8 Ron discusses how the ICC Termination Act in 1995 effectively removed the distinction between contract and common carriers, but the FMCSA still accepts applications for contract or common carriers – and what the legal implications are for brokers.
• And finally, in podcast 9 Ron looks at special legal precautions needed when hiring a carrier for intrastate carriers, especially if the task involves in a combination of vehicles (truck pick up and delivery to a rail yard).

After listening to Ron's podcast series I was struck by the details brokers have to track and how critical it is to have a solution at their fingertips such as CarrierWatch.  What did you think?  I want this blog to be a way for us to exchange ideas and share. 

Do you have a question for Ron or the CarrierWatch team?  Post a comment, and we'll dig into it and get back to you.