🎣 Fraud Claims Rock Freight Giant

Disclaimer: This article discusses the RICO lawsuit filed by Freight Essentials against WWEX Group. At this stage, the claims outlined in the Complaint are allegations. The Defendants have not yet filed their Answers, and these allegations will remain unproven unless and until a jury or court reaches a decision based on the facts.

Last month, Freight Essentials filed a RICO lawsuit against WWEX Group—parent company of Worldwide Express, GlobalTranz, and Unishippers. WWEX, ranked as the 3rd largest freight broker in the U.S. by Transport Topics last year, now faces serious legal challenges.

This week, we sat down with Dylan Admire, founder of Freight Essentials, to understand how this case could potentially change freight agency programs across the industry.

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The Legal Battle That Could Redefine Freight Agencies

When Dylan Admire launched Freight Essentials, he never imagined he'd one day go to battle with one of the freight industry's largest players. But after building a $30-40M business as the top agency at GlobalTranz, Dylan uncovered practices he couldn't ignore.

To learn more about the differences between freight brokers and freight agents, check out our previous newsletter:

🎣 What Are Freight Agents?

And what makes them different from freight brokers?

FreightCaviarPaul-Bernard Jaroslawski

Here’s the story in detail:

The Rise

Dylan built Freight Essentials from the ground up, leveraging his freight experience to create a successful agency. By 2021, his company was the top performer at GlobalTranz, serving clients like Redcon1 and Raw Five, and employing a growing team.

The Shift

In July 2021, GlobalTranz was acquired in a leveraged buyout (LBO) by Worldwide Express.

The inside story on how GlobalTranz and WorldWide Express came together

It has been a wild ride for GlobalTranz, with ownership shifting multiple times in just a few years.

FreightWavesJohn Kingston

This merger introduced changes Dylan says were anything but transparent. He alleges the following began to occur:

• Inflated LTL Costs: Carrier rates quoted in the system were higher than the actual invoices, allowing the company to pocket the difference.
• Insurance Markups: Agents were charged higher premiums than Worldwide Express paid insurers, keeping extra profits hidden.
• Customer Poaching: Clients were allegedly shifted to Worldwide Express under false pretenses, undermining long-term relationships agents built.
• Unfair Bad Debt Practices: Agents were held financially responsible for bad debt, even though credit lines were issued by the company itself.

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The Fallout

In June 2023, Dylan’s agency was terminated without notice while he was on a family trip.

Worldwide Express claimed ownership of Freight Essentials’ accounts, sending premeditated emails to Dylan’s customers suggesting they had acquired his company.

Matthew Leffler’s Take

Matthew Leffler, known as the “Armchair Attorney,” weighed in on the case and its broader implications for the freight agency model:

“GlobalTranz is accused of misrepresenting transportation costs to business development companies (BDCs), which caused them to lose out on their portion of gross margin splits, the commission payments they were contractually entitled to.”

Leffler also highlighted the allegations of client poaching:

“Freight Essentials’ largest customers were allegedly poached by Worldwide Express through an extension of a credit of over $1.5 million to one client and credits of $100,000 to another. Then Worldwide Express allegedly pretended to have acquired Freight Essentials to further move customers away from the agency.”

Leffler summarized the gravity of the situation:

“Now look, this is just a Complaint. Nothing contained in it is true until proven true. But if you are contemplating agency, you should understand what is being alleged here.”

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Dylan’s Advice for Freight Agents

1. Understand the fine print: Do you know your agency’s policies on bad debt, customer ownership, and hidden costs?
2. Evaluate your partnerships: Are you building your business or someone else’s?
3. Consider your independence: Many brokers have found success owning their MC numbers, gaining full control over their businesses.

Advice From FreightCaviar

There are plenty of freight agent programs out there. Working as an agent has many perks, but here’s the key takeaway:

Always read the fine print and make sure you’re partnering with a reputable company.

Simple steps now can save you headaches later.

What’s Next?

Dylan’s next big court date is in February, where key evidence could be unsealed and made public. He’s committed to fighting for fairness and creating a better future for freight brokers.

Our Interview with Dylan Admire

Catch the full story from Dylan Admire on Apple Podcasts, Spotify, or YouTube.

FREIGHT MEME OF THE DAY