Lawsuit Alleges Hidden Fee Scheme Involving Fuel Charges and Cargo Insurance
Logistics company Freight Essentials has initiated a federal lawsuit against WWEX Group and its affiliates, accusing them of engaging in fraudulent business practices through hidden fees. The suit, filed on Thursday in the Northern District of Texas, claims that the entities under WWEX, including Worldwide Express, GlobalTranz, and Unishippers, deceived consumers and small business owners by imposing undisclosed fees related to fuel and cargo insurance.
GlobalTranz is specifically accused of misrepresenting transportation costs to business development companies (BDCs), leading to losses in commission payments that these companies were contractually owed. This alleged scheme allowed WWEX to amass hundreds of millions in profit at the expense of BDCs and consumers, who faced unrecognized increases in their transportation expenses, according to the lawsuit.
In 2021, Worldwide Express and GlobalTranz announced their merger, forming the fourth-largest logistics brokerage organization in the U.S. with an annual revenue of $4.9 billion.
The lawsuit asserts that Freight Essentials, which was GlobalTranz’s top-producing BDC in April 2023, uncovered the hidden fee practices. In alleged retaliation, the companies terminated Freight Essentials’ contract without proper notice. “Freight Essentials refuses to be run out of business or silenced,” the lawsuit states.
The suit claims that GlobalTranz misrepresented fuel costs to impose higher charges and applied hidden fees for cargo insurance as well. Moreover, it accuses Worldwide Express of conducting “months of corporate espionage” against Freight Essentials following concerns raised about their business practices, including attempts to create discord between Freight Essentials and its customers and efforts to siphon those clients.
“This is a classic David versus Goliath case,” said Freight Essentials attorney Rogge Dunn in a statement.
WWEX has yet to respond to inquiries regarding the lawsuit, and Freight Essentials is seeking an unspecified amount in damages.
