Carriers Seek $2.6M In Unpaid Loads From Convoy
Hundreds of unpaid motor carriers are named as defendants in a lawsuit filed by Swiss Re, the bonding company that backed Convoy.
Hundreds of unpaid motor carriers are named as defendants in a lawsuit filed by Swiss Re, the bonding company that backed Convoy, the now-defunct digital freight brokerage. The case aims to determine the distribution of a $75,000 surety in the wake of Convoy’s $3.8 billion collapse in October 2023.
Case Details:
The interpleader case, filed in the U.S. District Court for Northern Alabama, lists Swiss Re as the plaintiff and 429 carriers and factoring companies as defendants. This follows a separate interpleader case in early 2024, where Ikea sued Convoy to determine who should be paid the $519,254 owed to carriers that hauled its freight.
In the new case, around 400 carriers and a few factoring companies are claiming a portion of the $75,000 bond, but the combined claims total $2,690,074. “The value of the interpleaded funds is $75,000, which Swiss Re is ready, willing, and able to deposit into the registry of this Court,” according to court documents. However, claims against the bond total nearly $2.7 million.
Calls for Reform:
After Convoy’s bankruptcy, Surinder Gill of Gill Freightlines called for reform, questioning why a $3.8 billion broker could only be required to have a $75,000 surety bond.
One fleet owner agreed, pointing out that brokers face fewer financial requirements than carriers. "Carriers have to carry $1,000,000 in insurance, but brokers need just a $75,000 bond," the fleet owner said. "It’s like we’re paying more to make less, and they pay less and make more."
