Logistics firm Freight Essentials filed a federal lawsuit against WWEX Group and its affiliates, alleging that the company is engaging in fraudulent business practices with hidden fees.
The suit was filed Thursday in the Northern District of Texas. It alleges the companies that make up WWEX, including Worldwide Express, GlobalTranz and Unishippers, defrauded consumers and small-business owners by charging hidden fees related to fuel costs and cargo insurance.
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. This led WWEX “to rake in
hundreds of millions of dollars that flow directly to their bottom lines and at the expense of the BDCs and consumers, who were unknowingly harmed by the hidden fees added to their transportation costs,” the suit says.
Worldwide Express and GlobalTranz in 2021 announced that their companies were combining. Now, GlobalTranz, Worldwide Express and Unishippers are the fourth-largest U.S. logistics brokerage organization, reaching $4.9 billion in annual revenue.
The suit claims that Freight Essentials, which was GlobalTranz’s No. 1 producing business development company in April 2023, uncovered the hidden fee scheme. The companies allegedly retaliated against Freight Essentials by ending their contract without proper notice.
“Freight Essentials refuses to be run out of business or silenced,” the suit says.
As part of the scheme, GlobalTranz allegedly misrepresented fuel costs to charge more. GlobalTranz is also accused of applying hidden fees to overcharge on cargo insurance.
The lawsuit accuses Worldwide Express of engaging “in months of corporate espionage” against Freight Essentials after the company expressed concern about business practices.” Worldwide Express allegedly created conflict between Freight Essentials and its customers and tried to steal the customers.
“This is a classic David versus Goliath case,” Freight Essentials attorney Rogge Dunn said in a statement.
WWEX did not immediately respond to a FreightWaves inquiry about the lawsuit.
Freight Essentials is seeking an unspecified amount of money as damages.
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