newsworthy
transport brokers face
material handling
program dedicated
new liability threat
A MARCH 19 VERDICT IN AN ILLINOIS COURT HAS PUT DOMESTIC
truck brokers in the unprecedented and potentially costly position of
assuming liability for the actions of motor carriers they contract with to
move customers’ freight.
A circuit court jury in Will County, Ill., found C.H. Robinson Worldwide,
one of the nation’s largest brokers, liable in a fatal 2004 collision involving
Utah-based Toad L. Dragonfly Express, which Robinson hired to haul a load
of potatoes. Two people were killed and another seriously injured in the
accident. The driver was reported to have been driving on a suspended
license with falsified logbooks. The trucker eventually went out of business.
Robinson was named as a defendant based on legal doctrine that makes
an employer “vicariously liable” for an employee’s actions when they occur
within the scope of employment. Robinson argued that it only booked the
load with Dragonfly and that the driver was an independent contractor, not
a Robinson employee. However, the jury determined that the trucker was
considered part of the brokerage company instead of an independent carrier, and that Robinson was liable as an employer. Robinson itself was not
accused of negligence or any unsafe actions.
Robinson officials declined to be interviewed for the story, citing pending
litigation. In a statement, Angie Freeman, a Robinson vice president, said the
company would appeal the verdict.
Unwanted exposure
If upheld on appeal, the verdict may open up a new and troublesome legal frontier for brokers and intermediaries across
all transport modes. Historically, brokers have not been
held liable for accidents caused by a carrier they hire.
Rather, the carrier and insurance company assumed all
accident-related liability for bodily injury, property
damage, and loss and damage to freight.
Even so, said an article in the April 2009 issue of
TransDigest, published by the Transportation &
Logistics Council Inc., the Illinois case “
clearly demonstrates that a third-party logistics
provider can have significant liability for
the acts of motor carriers that [it] hires.”
And the liability could run into the millions of dollars. Jon A. Langenfeld,
transportation analyst for the
Milwaukee-based investment firm
Robert W. Baird, says Robinson maintains a $5 million
deductible on its liability coverage, the amount it could be
liable for if the verdict is upheld.
Langenfeld says that although plaintiffs’ lawyers would be
more likely to pursue deep-pocketed brokers like p. 12
The material handling industry recently took an important step in its efforts
to bring young workers into the fold.
On April 30, the Material Handling
Education Foundation Inc. (MHEFI)
dedicated the Don Frazier Material
Handling Technical Training Program
in Rock Hill, S.C.—an event that coincided with the opening of the Don
Frazier Supply Chain Training Center.
Named for Don Frazier, founder of
Frazier Industrial Co., the pilot program provides an entry-level material
handling education for high school,
technical school, and community college students. MHEFI says the students will gain practical skills and
experience in state-of-the-art warehouse and distribution training centers across the nation. The Frazier program is modeled after the program at
the Lehigh Career and Technical
Institute near Allentown, Pa. The Rock
Hill facility is the first fully functioning
laboratory established in the program.
“Out of respect for Mr. Frazier and his
long and generous leadership of the
Material Handling Industry of America
(MHIA) and MHEFI, member companies of MHIA have offered needed
equipment and expertise to the program,” said Victoria Wheeler, MHEFI’s
executive director, in prepared remarks.
Those companies include Atlas Material
Handling, Bluff Manufacturing,
Bushman Equipment, Demag Cranes &
Components, Diamond Phoenix,
Hamilton Caster, Hanel Storage
Systems, Hytrol Conveyor, NACCO
Material Handling – Yale, Southworth
International, Spanco, Steel King
Industries, and Unarco Material
Handling, she said. Wheeler also noted
that several local companies, including
West Marine, Ross Industries, State
Farm Insurance Co., Black & Decker,
and US Foods, have helped fund the
program’s startup costs.
