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Whole High quality Logistics (TQL), the nation’s second-largest freight dealer, is underneath hearth in a brand new federal lawsuit filed on Feb. 25 within the U.S. District Courtroom for the District of Columbia.
Pink Cheetah Categorical LLC, a small Kissimmee, Florida-based motor provider, alleges that TQL has flouted a 2023 Division of Transportation order mandating compliance with federal dealer transparency guidelines. The swimsuit, which seeks declaratory and injunctive reduction, reignites a long-simmering debate over charge transparency within the trucking business – simply as freight markets brace for brand spanking new tariffs.
The grievance facilities on TQL’s alleged refusal to supply Pink Cheetah with transactional data for 15 hundreds hauled over the previous three years, regardless of a Nov. 30, 2023, order from the Federal Motor Provider Security Administration. That order, issued after an investigation sparked by Pink Cheetah’s 2023 grievance, directed TQL to ditch contract language waiving carriers’ rights underneath 49 CFR 371.3 – a regulation guaranteeing carriers entry to dealer data – and to adjust to future transparency requests. Pink Cheetah claims TQL has performed neither, accusing the Cincinnati-based brokerage of “arrogantly” performing “above the legislation.”
The backstory traces again to Jan. 18, 2023, when Pink Cheetah hauled a load of ice cream from Fort Wayne, Indiana, to Akron, Ohio, for TQL on the spot market. The speed affirmation pegged Pink Cheetah’s pay at $1,500, together with a $300 layover payment. However when proprietor Dakota Springfields requested data to see what TQL charged the shipper, TQL refused, citing a 2019 broker-carrier settlement through which Pink Cheetah had waived its transparency rights. Springfields cried foul, arguing the waiver violated federal legislation. After FMCSA stepped in and compelled TQL at hand over the data, they revealed TQL had pocketed 44% of the shipper’s charge, properly above the business’s oft-cited 14%-16% dealer margin common.
That revelation fueled Pink Cheetah’s push for extra data in December 2023, solely to be rebuffed once more by TQL. The provider alleges this defiance not solely breaches the FMCSA order but in addition harms its potential to pursue additional litigation in opposition to TQL. Now, Pink Cheetah desires the courtroom to compel TQL to launch unredacted data for 14 further hundreds, strip the waiver clause from all its contracts and obey the FMCSA order industrywide.
For TQL, the stakes are excessive. With over $9 billion in annual income and a popularity as a brokerage juggernaut, the corporate has but to publicly reply to the swimsuit. Its deadline to reply is March 18.
As we brace for the response, the corporate’s previous stance – rooted in contractual freedom – could face scrutiny. Brokers have lengthy argued that 49 USC 14101(b) lets them negotiate waivers with carriers, however FMCSA’s current rulemaking and prolonged interval to remark could reject that notion totally, affirming brokers aren’t “shippers” with such latitude.
Let me be clear: That is among the many most essential lawsuits in freight brokerage and will influence tens of hundreds of brokers within the U.S. Like TQL, practically each dealer makes use of comparable transparency waivers. Whereas dealer transparency has been a difficulty for many years, it has turn out to be a lightning rod in recent times.
Authorized specialists are cut up. TQL is more likely to counter that the waiver is a legitimate non-public settlement or that Pink Cheetah’s damages are speculative. Both approach, the case checks FMCSA’s muscle underneath 49 USC 14704, which lets carriers sue to implement DOT orders. Whatever the end result within the District Courtroom, appeals on this case are possible, which may additional set up disagreements among the many federal appellate courts.
As freight fraud spikes and new tariffs loom – 25% on imports from Canada and Mexico beginning Tuesday – the timing couldn’t be worse for TQL. For now, the business watches this David-and-Goliath conflict, questioning if Pink Cheetah’s roar will shake up broker-carrier dynamics – or simply fade into the noise.
Matthew Leffler is a trucking business professional and an adjunct professor of legislation at Michigan State College Faculty of Regulation. He will be reached at matthew@armchairattorney.com. Study extra from Leffler at FreightWaves’ upcoming Small Fleet & Proprietor-Operator Summit on March 26.
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