Non-Government Transportation Industry Enforcement Overreach: Should Carrier 411 and Similar Platforms Be Entitled to Section 230 Protections?

An Opinion Piece by the Double Broker Bounty Hunter

Overview of Carrier 411 and the FreightGuard Report Program

For those who do not know, Carrier 411 is the oldest and most popular motor carrier vetting platform available. The platform allows subscribers (only shippers and freight brokers) the opportunity to view data drawn from FMCSA's SAFER portal, coupled with proprietary tools to help freight brokers and shippers to determine the reliability of a searched carrier.

One of the hottest selling features of Carrier 411's service is their FreightGuard Reports program. This program allows brokers to submit negative reviews against carriers for the purpose of warning other brokers who may potentially do business with the reported carrier, and to compel the carrier to make a change. This feature originally offered 12 categories from which brokers can report against carriers, and was recently modernized to include a total of 34 categories ranging from broadly based accusations that can encompass a multitude of undesirable carrier actions, to very specific accusations that indicate the violation of federal law by the carrier.

Carrier 411 asserts that they have no obligation nor liability for the content posted by subscribers, citing protections under Section 230 of the Communications Decency Act which protects platforms from liability for content posted by 3rd party subscribers. This is the law that protects social media from liability for not curbing disinformation from being displayed on the platform. Further, platform subscribers have limited protections under the First Amendment so long as the posting entity is not knowingly posting slanderous or libelous content, and the legal benchmark to prove intentionally incorrect content is remarkably remote in probability. The question here is if Carrier 411 rightfully enjoys these protections.

Carrier 411 feels that carriers hiring attorneys to manage carrier reputations is a pointless gesture. ?First, the?platform asserts that over 95% of reports filed are completely factual, true, and based on evidence. ?Second, lawsuits often attempt to include Carrier 411 as a co-defendant. ?Since Carrier 411 asserts its immunity under Section 230 protections, Carrier 411 invites litigation to include the platform. ?Finally, the platform sites that over 95% of the legal challenges brought on by carriers against brokers over libel or slander are "frivolous" and "an act of desperation" designed to intimidate and extort brokers.? Thus far, Carrier 411 has successfully fended off such challenges in court citing Section 230 protections.

Intended and Unintended Consequences

What makes this feature so popular is that a single FreightGuard Report has an instant impact on the ability of the carrier to continue to do business with other Carrier 411 subscribers. In cases where severe infractions by carriers have occurred, such as illegal brokerage or back-solicitation (some of the worst crimes a carrier can commit against a broker), brokers have the ability to file a FreightGuard Report, that immediately places a flag on the carrier's profile. In the first 72 hours after a report is submitted, the report is not fully visible on the platform. Subscribers can only see that a report is in "pending" status, and the category(s) under which the report has been filed. This pending status is just the start of the unending barrage of load rejections for the reported carrier. Full details (incident description and carrier rebuttal, if rebuttal was filed in time) will become available to subscribers after the 72-hour period expires, from which a broker can decide for themselves if they want to work with the carrier or not. This is especially attractive to brokers who want to fight fraud among carriers without going through the hassle and red tape of filing a formal complaint with FMCSA and DOT to investigate and determine of the carrier should have their authority revoked for the infraction. The process of the FMCSA reporting path, including FMCSA investigation and adjudication, can take up to 18 months. The immediate impact of these reports to fight fraudulent parties is a serious draw toward the platform and has a positive impact on the industry as a whole by cutting off a fraudulent entity from access to a very large portion of the market.

One of the ignored failings of the FreightGuard Report system is that there is no mechanism in place to investigate the validity of a report beyond a 500-character description of the event by the reporting broker, and a 500 character defense by the reported carrier. Neither the broker nor carrier can upload evidence to substantiate or refute claims. Carrier defensive statements that are provided within the 72-hour response period are usually emotionally charged, and thus are widely dismissed as desperate and unreliable. As a result, most brokerages that use Carrier 411 for carrier vetting have a zero tolerance policy: If a FreightGuard Report is present on a carrier's profile, then the carrier is instantly disqualified from use.

With a widely reported market share of over 60% of US brokerages having a Carrier 411 subscription (sometimes only as a secondary layer to a subscriber's vetting process), more than half of the brokers that motor carriers rely on for spot freight opportunities will shut out carriers what have reports on their record. The brokers that are included in the reported 60% market share include the overwhelming majority of large and medium brokers that have exceptional brand names and a massive share of the freight that is in motion across the country at any given time. As a result, these reports effectively restrict a motor carrier's ability to operate, resulting in a massive reduction in revenue and usually the failure of the carrier's business. For example, a carrier with a fleet of 10 trucks that gets a report against them will instantly lose the majority of their business, and cause over a dozen employees to lose their jobs, and likely drive the carrier into bankruptcy. When a carrier is guilty of the accusation, it is a powerful tool at shielding the industry from a bad actor until FMCSA can get around to investigating the matter. If the carrier is actually innocent of the accusation against them, the impact of the report is still the same. Ultimately, innocent carriers are driven into bankruptcy with no due process. An innocent or guilty carrier's only hope for survival is to attract direct shipper contracts. Unfortunately, Carrier 411 has many shipper customers as well who see these same reports, and usually disqualifies the reported carrier from bidding based on the presence of the report.

The consequences of a report boil down to a nuclear level attack against the carrier, instantly applying an informal sanction against the carrier on a platform with near industry-wide visibility. The unintended consequences of these reports include widespread layoffs of reported carrier employees, devastating economic harm to reported carriers, and desperate legal battles to save a carrier's business. The only carriers that are seemingly unaffected by the report program are carriers that are exceptionally large with long established relationships with direct shippers that by size or by reputation can blow off the impact of the reports. They are often carriers that have associated brokerages of their own and will broker freight to themselves to overcome the adverse effects of a report. Even if a mega-sized carrier has received a mountain of reports alleging the worst transportation sins imaginable, if they have an equally large brokerage, they keeps enough freight in house so that company drivers and owner/operators are unaffected by these reports.

Bad Actor Brokers' Nuclear Arsenal Against Carriers and Advocates Who Seek to Defend Innocent Carriers

There is some merit to the reporting system in identifying bad actors among the carrier pool. Undeniable proof of illegal activity should be brought up and widely disseminated, and Carrier 411's platform is a good way to get an initial report out to the public. A responsible broker will also file a formal report with DOT and FMCSA to mirror the FreightGuard Report, legitimizing the broker's stance and intent to do right for the industry as a whole. Unfortunately, most brokers will not bother with formal reports, and simply use the FreightGuard Report as a singular tool to fight irresponsible actors they feel do not deserve to retain a carrier authority. Carrier 411 refuses to acknowledge that many of the reports against carriers are emotionally charged, and facts of the case are often misrepresented by reporting brokers to support a one-sided narrative. Should the event come under federal or judicial investigation, the one-sided narrative can lead to a judgment against the broker in a court of law, leading to a monetary award to the carrier for a broker's overreach on the use of the platform to damage or destroy the carrier's business.

When inaccurate or false reports are made against carriers, carriers have no defense beyond the 500-character rebuttal which is usually outright dismissed by brokers because it is often written with an emotional tone or poor grammar. Remember, a carrier has only 500 characters to defend themselves in a report. Carriers who maintain their innocence will often hire non-attorney advocates at $500 to $1000 per report or reputation management attorneys at $2000 to $5000 per report to attempt removal. The idea is to introduce a third party, neutral by nature, and bring an unemotional pause between all parties to allow for an open dialogue. Some of these services act as independent investigators and mediators to get to the heart of a dispute and negotiate a mutually beneficial settlement between a reported carrier and a reporting broker. one such reputation management attorney boasts a successful litigation where a one-truck carrier was awarded $480,000 in court over an unjustified report, that included a $200,000 punitive damages award. This demonstrates the real liability risk to freight brokers who use the reporting system. Carriers have also attempted to sue Carrier 411 for having liability in failing to require validation of reported content. Again, citing Section 230 protections, Carrier 411 has successfully avoided liability when their customers are successfully awarded against in court.

In several documented cases where advocates have been employed, brokers have admitted to submitting reports against carriers after having a "bad day". In one such case, a carrier's tracking disconnected in a cell phone dead zone, and the carrier could not be reached because they had no service. Tracking picked back up after the carrier entered a zone of reliable service. A report for "fraudulent activity" and "deceptive practices" was filed while the carrier was still in the dead zone. On the same day, the broker had a load double brokered against him and another carrier held a load hostage on him. The loss of tracking was the "straw that broke the camel's back", and the broker filed FreightGuard Reports against all three carriers. After an advocate hired by the carrier who lost tracking began investigating the case and made initial contact with the broker, the broker immediately apologized for the report and removed it, however the damage to the carrier had been done. The report has been publicly available for two weeks costing the carrier over $10,000 in lost business. The carrier was just happy to be rid of the report and chose to not consider a legal remedy.

There are also proven cases where a scammer (fraudulent broker who intended to commit double brokerage), who obtained a Carrier 411 account, filed false reports against carriers who caught the scammer double brokering loads. The scammer would file a report to trigger the email notification to the carrier that a FreightGuard Report was filed in an attempt to coerce the carrier to not file a report against the scamming broker to DOT and FMCSA. Shortly after the FreightGuard Report was filed, the scammer immediately deleted the report in an attempt to avoid detection for filing false reports. According to Carrier 411, the platform logs all such reports and does endeavor to detect patterns that suggest brokers using reports as a weapon. If such indications do appear, Carrier 411 claims to act unilaterally to purge reports by the broker and cancels the broker's account.

There is also no accounting for situations where carriers are accused of multiple categories in a single report, where the real infraction is not identified in the selected accusation categories at all. In one such case, a carrier was late to a pickup, and the broker claimed that their client pulled their business away from the broker as a result. The broker filed a FreightGuard Report citing double brokering, back-solicitation, and fraudulent activity, where the brokers comments only supported a possible accusation of a service failure for being late for a pickup. It was later discovered by an advocate hired by the carrier that the incident had no impact on the broker's relationship with their client. The broker later removed the report after a month of negotiation between the advocate and the owner of the brokerage where in the end, the carrier offered a Reverse Truck Order Not Used (TONU) to the broker for the infraction. Over the course of that month, the carrier lost over $25,000 in revenue due to the presence of the report. It was more valuable to the carrier to get the report removed and pay a fine to the broker so he could get on with his life rather than spend the money necessary to file suit against the broker for the?inaccurate report.

Some of these reputation management services are supported by fraudulent entities and organized criminal elements from overseas. There are numerous cases showing where some of these services use aggressive and often illegal means to engage with brokers and force the removal of FreightGuard Reports using the same tactics that these same groups use when attacking or extorting brokers while illegally holding cargo for ransom. These bad actors are making numerous threats of legal action, using denial of service attacks to disrupt a broker's operations or even threaten bodily harm to convince a broker to remove a report. These bad actors counteract professional advocacy efforts that rely on negotiation and mediation, and undermine any professional efforts to advocate for innocent carriers. The tactics of bad actors have caused many brokers to implement policies against accepting efforts of appropriate advocacy groups and driving carriers closer to using litigation as the only possible means of defending their innocence.

Critics Face an Uphill Fight

Critics of the FreightGuard Reporting program feel that the program allows brokers to act to drive carriers out of business with no due process. Carrier 411 has a "no contact" policy with carriers so there is nothing a carrier can do to defend themselves from accusations beyond the 500-character response in the first 72 hours. Even the most well-crafted and compelling response carriers can write carries little to no real weight while uninvolved subscribers attempt to determine if they are willing to do business with a reported carrier.

Critics also claim that Carrier 411 and subscribing members are usurping the authority of the FMCSA to revoke authorities since the impact of a single report has been known to drive carriers into near immediate business failure, rendering the presence of a motor carrier authority as moot. ?According to critics, at least when under investigation by DOT or FMCSA, a carrier is entitled to due process and can provide a multitude of materials and evidence to attempt to prove their innocence. Failure on an FMCSA or DOT investigation usually results in a fine, revocation of authority, and possible criminal prosecution if a crime was committed. ?Carrier 411 subscribers seem grateful that someone is having an industry wide impact against bad actors since they feel that DOT and FMCSA are too focused on safety of the industry and not the security of the industry. ?Customers are seemingly happy to allow Carrier 411 to play the role of the industry "sheriff". ? In this capacity, Carrier 411 has been instrumental in providing DOT and DOJ material evidence in cases involving massive domestic fraud rings that has led to convictions. ?Carrier 411 has proven themselves to be a partner to the industry and to the government. Despite the good the platform does, it still has the unintended power to drive good carriers out of business with a single unproven report.

A common point of feedback critics provide Carrier 411 is that there is a way for this platform to be even better. ?The FreightGuard Reports are mostly positive for the industry but creating a challenge mechanism for carriers that can prove their innocence can't help but to make the platform an even more powerful force for good. ?Some indicate that Carrier 411 can retain a greater sense of fairness and trust among all industry stakeholders by offering a service to independently investigate and adjudicate contested reports. One critic indicated that Carrier 411 stands to further profit from the chaos of the FreightGuard system by offering a binding arbitration service to reported carriers to have the matter decided by a panel of industry experts based on evidence offered by both sides. By having an independent representative from each discipline in the industry (a broker, carrier, dispatcher, insurance/risk manager, and factoring provider) sit in judgement of the case where both the carrier and broker agree to accept the judgement of the panel, a fair and neutral decision can be reached by a panel vote to determine if the report is valid or not, and thus if the report should be completely removed. ?Such a proposal can give Carrier 411 the ability eliminate criticism over the platform as a means of due process would be in place. ?A reported carrier would pay a fee that compensates the panel for their time. ?Supporting documents are uploaded by both sides over a set period of time, and the panel will make a decision. ?The panel can meet once per week to discuss the cases and issue verdicts, and both sides will then need to accept the judgement. ?This can actually not just be a reputation builder for the platform but also a significant revenue stream.

Despite an elegant and potentially profitable solution for Carrier 411 to the problem of the unofficial sanctions and potential liability that the reports can create by their own existence, Carrier 411 dismisses any idea that the program is biased and that brokers have the ability to accept and deny the validity of reports themselves based on the 500 character case both sides provide. They feel that allowing for an independent panel to adjudicate contested reports undermines the integrity of the platform and would drive customers away. Carrier 411 claims they are being a responsible partner to the security and integrity of the industry despite the fact that they know the presence of a report has an immediate and devastating effect on reported carriers, regardless of guilt or innocence.

Carrier 411 Modernizes the FreightGuard Reports Program

Prior to the platform's start toward modernization in October of 2024, subscribers were given a framework for airing negative feedback. The subscriber would identify the reported carrier, assign one or multiple categories to the reported event, and provide a 500-character justification. The reported carrier would get an instant email on their SAFER verified email address advising them of the report and giving the carrier the opportunity to provide a 500-character rebuttal. In theory, the broker is to review the response of the carrier and determine guilt or innocence. If the broker feels that the report is no longer necessary, the broker can remove the report as though it never occurred. The "pending" notification on the carrier's profile would disappear without a trace.

Per Carrier 411 policy, only the broker that applies the report can remove the report. If the reporting broker agrees to removal, the report is completely removed from the carrier's profile, and only remains in Carrier 411's internal database. A reported carrier's only hope is to appeal to the mercy of the reporting broker. There is also no recourse for carriers that are given reports by brokers who go out of business. If a broker were to go out of business or even pass away, all reports issued by the broker are permanent. Carrier 411 will not intervene with reports made by brokers who have since closed their doors.

On October 1, 2024, Carrier 411 quietly introduced a modernization of the FreightGuard Reports system. This modernization has two major impacts. First, The program removed two of the old categories and introduced 24 new ones for a total of 34 accusation categories. The other change that took place is that reports will remain on a carrier's profile permanently. A broker can "delete" a report that is no longer needed; however, the report itself will remain on the carrier's profile in "deleted" status. This means that the broker's and carrier's 500-character comments as well as the identity of the reporting broker will be blurred out. All that will remain is the accusation categories, and one of six reason codes for the deletion that is assigned by the reporting broker. This means that even though the matter may have been settled, the report will permanently remain present on the carrier's profile. Carrier 411 sites protection of brokers from scammers and services that aid desperate carriers in removing reports as the reason for the need to upgrade the platform and make reports permanent. The platform specifically sites their desire to "pull the rug" out from under reputation management services that aid carriers, regardless of their methods (mediation or aggression). It is believed that the platform's changes will stop aggressive attacks against its customers by making reports "eternal".

Uncertain Future on Section 230 Protections

It is the move by Carrier 411 to make the reports permanent, even in a "deleted" form, that calls into question the platform's eligibility for Section 230 protections. Section 230 is designed to protect the platform from liability for content it does not control. Critics and legal experts argue that by making the report accusations permanently visible, even though the comments and broker identities are blurred out and reclassified as "deleted", that Carrier 411 is no longer passively hosting the comments of subscribers. They are now actively shaping how the content is viewed, ensuring that accusations are forever etched onto a carrier's record. Though anyone viewing the record after "deletion" cannot identify the reporting broker, they will very clearly still see that a report once existed, still influencing decisions made about the carrier's worthiness to haul freight for the broker reviewing the carrier's profile. Additionally, there is no mechanism for a positive report on the platform. This indicates that all information available for subscriber production or consumption is negative or neutral. Therefore, if any information exists on a carrier's profile beyond regulatory data provided by SAFER, it is automatically painted in a negative context. Since Section 230 protections pertain to platforms that have no influence on content, does Carrier 411's change to make deleted reports forever visible constitute influencing content?

No one is arguing that there is a need for services like Carrier 411. Until FMCSA upgrades the SAFER platform to incorporate reports for bad behavior of brokers and carriers alike (for free, and usable by all industry stakeholders), Carrier 411 and similar services that offer negative reporting against carriers (Highway, RMIS, and Carrier Assure) will thrive in this space. A few others, like MyCarrierPortal, actually do offer a means for carriers to appeal reports, but changes in this space by its largest player (Carrier 411) will drive changes at the others.

What should their level of influence be? What level of liability protection should they have as service providers given the amount of influence the platforms may have on subscriber content or how they shape that content? The legal liabilities are largely unknown and will not be known until tested in court. Unfortunately, the only stakeholders who need to test the boundaries of these protections (small carriers and owner operators) are the stakeholders that cannot financially afford to mount a suitable case in court on their own. At this point, carrier advocacy groups like the Owner Operator Independent Drivers Association (OOIDA) have not expressed interest in taking this matter to court. Until someone does, Carrier 411, their subscribers and similar platforms will continue to wield a virtual nuclear arsenal over small carriers and influencing small carrier participation and security of the transportation industry as a whole.