Summary

Total Quality Logistics (TQL), the nation’s second-largest freight broker, is facing a new federal lawsuit filed by Pink Cheetah Express LLC, a small Kissimmee, Florida-based motor carrier. The suit alleges that TQL has refused to provide transactional records for 15 loads hauled over the past three years, despite a November 2023 order from the Federal Motor Carrier Safety Administration (FMCSA) mandating compliance with federal broker transparency rules.

Background on the Dispute

The controversy surrounding Total Quality Logistics (TQL) and its alleged refusal to provide transactional records for Pink Cheetah Express LLC is rooted in a long-standing debate over rate transparency in the trucking industry. This issue has been simmering for years, with various stakeholders pushing for greater clarity and fairness in how freight brokers operate.

Key Events Leading Up to the Lawsuit

• On January 18, 2023, Pink Cheetah hauled a load of ice cream from Fort Wayne, Indiana, to Akron, Ohio, for TQL on the spot market. The rate confirmation pegged Pink Cheetah’s pay at $1,500, including a $300 layover fee.
• However, when owner Dakota Springfields requested records to see what TQL charged the shipper, TQL refused, citing a 2019 broker-carrier agreement in which Pink Cheetah had waived its transparency rights.
• The FMCSA intervened and forced TQL to hand over the records, revealing that TQL had pocketed 44% of the shipper’s rate – well above the industry’s oft-cited 14%-16% broker margin average.

Allegations Against Total Quality Logistics

The lawsuit filed by Pink Cheetah Express LLC alleges that TQL has flouted a 2023 Department of Transportation order mandating compliance with federal broker transparency rules. The suit seeks declaratory and injunctive relief, including the release of unredacted records for 14 additional loads and the removal of the waiver clause from all TQL contracts.

Federal Motor Carrier Safety Administration’s Role

The FMCSA has been instrumental in addressing the issue of rate transparency in the trucking industry. In November 2023, the agency issued an order directing TQL to ditch contract language waiving carriers’ rights under 49 CFR 371.3 – a regulation guaranteeing carriers access to broker records.

Industry Implications and Potential Outcomes

The outcome of this lawsuit could have far-reaching implications for the trucking industry, with potential impacts on tens of thousands of brokers in the U.S. Legal experts are split on the issue, with some arguing that TQL’s actions violate federal law while others claim that the waiver is a valid private agreement.

Timeline and Next Steps

The deadline for TQL to respond to the lawsuit is March 18. The case will likely be closely watched by industry stakeholders, and appeals in this case are likely, which could further establish disagreements among the federal appellate courts.

Conclusion

The dispute between Pink Cheetah Express LLC and Total Quality Logistics (TQL) over broker transparency has significant implications for the trucking industry. As freight fraud spikes and new tariffs loom, the timing couldn’t be worse for TQL. The outcome of this lawsuit will likely have a lasting impact on broker-carrier dynamics and could potentially lead to changes in how freight brokers operate.

Expert Insights

Matthew Leffler, a trucking industry expert and adjunct professor of law at Michigan State University College of Law, notes that "this is among the most important lawsuits in freight brokerage and could impact tens of thousands of brokers in the U.S." He emphasizes that the case tests FMCSA’s muscle under 49 USC 14704, which lets carriers sue to enforce DOT orders.

Future Developments

The outcome of this lawsuit will be closely watched by industry stakeholders. The Small Fleet & Owner-Operator Summit on March 26 will provide further insights into the issue and its potential impacts on the trucking industry.