Freight Day! 🚚 We’re diving into the case that could impact broker liability law. RXO is involved in a legal dispute stemming from the theft of an $11.5 million shipment of cellphones brokered for PCS Wireless.

The key issue at hand is whether RXO acted as a carrier or a broker, which could have significant implications for future broker liability cases. More ahead 👇

💬 More in Freight:

⚫️ Trucking CEO Allegedly Murdered By Driver

⚫️ Flexport Sues Freightmate AI

⚫️ U.S Trade With Mexico & Canada Hit $134B In January

⚫️ Gatik Partners To Scale Level 4 Autonomous Trucks

Trucking CEO Allegedly Murdered By Driver 🔪

Court records recently revealed that the CEO allegedly murdered by his own driver owed the man a “substantial amount of money.” Dane Koteski, 46, CEO of ATG Truckload, was found dead in his office on March 5th in Crestwood, Illinois, with signs of violence and a fire nearby. On March 16th, 53-year-old Josif Suclea, a truck driver for ATG, was charged with first-degree murder.

According to court documents, Suclea had been a longtime employee of ATG and had been informed by Koteski that the company was facing bankruptcy. Koteski reportedly owed Suclea significant money but was unable to pay.

The Crime and Investigation

Surveillance footage shows Suclea entering Koteski’s office at 2:37 p.m. on March 5th, following Koteski into another room. A brief struggle ensued, followed by cries and Koteski asking, “Why?” Suclea allegedly responded, “I had to.” The phone call Koteski was on ended abruptly, with investigators later finding the phone in a trash bin, with a bloody fingerprint.

Afterward, Suclea fled in an ATG Freightliner semi truck, which he drove to a truck stop in Holland, Michigan, where he was arrested. A large knife and blood evidence were found in the truck. Investigators later determined Koteski’s throat had been cut.

Suclea is being held without bail in Cook County. He is undergoing cancer treatment, though the timing of his diagnosis is unclear. There is no record of ATG Truckload officially filing for bankruptcy.

Flexport Sues Freightmate AI 🥊

Flexport has filed a lawsuit against Freightmate AI, accusing its founders Yingwei (Jason) Zhao and Bryan Lacaillade of stealing tens of thousands of sensitive documents to build their company.

The lawsuit, filed in the U.S. District Court for the Northern District of California, claims Zhao and Lacaillade secretly planned to start a competing company while working at Flexport. Zhao allegedly exfiltrated sensitive files, including trade secrets, before leaving Flexport, downloading them onto personal devices and cloud storage.

The complaint states that Zhao downloaded Flexport's proprietary platform source code before his departure, and Freightmate quickly launched a competing product, claiming success that Flexport believes could only have been achieved using stolen information.

Flexport is suing for trade secret misappropriation, copyright infringement, and breach of contract, seeking to recover its intellectual property and punitive damages. Freightmate AI has denied the allegations and intends to defend itself in court.

REVIEW OF THE WEEK PRESENTED BY CARRIERSOURCE.

Wyse Elemental Solutions 🏆

This week, we spotlight Wyse Elemental Solutions, a customer-focused carrier based in Denver, NC, known for its commitment to on-time pickups and deliveries.

Specializing in box truck services, Wyse Elemental Solutions places safety as its top priority, both on and off the road. With a fleet size of just 1, they take pride in their trained drivers who are courteous, professional, and passionate about their work.

With a 4.9/5 rating on CarrierSource from 15 reviews, Wyse has earned a reputation for reliability and exceptional service. Wyse Elemental Solutions operates across the Eastern U.S., with a focus on the Southeast and a favorite lane running from Charlotte, NC to Columbia, SC.

Carrier Name: Wyse Elemental Solutions
DOT Number: 3672541
Headquarters: Denver, NC
Fleet Size: 1

Carrier Review: They have a 4.9/5 stars on CarrierSource based on 15 reviews. Tim M., a verified shipper commented, "Wyse has carried many loads for us. They are always prompt on pick up and delivery. We have never had a problem with damages or a customer complaint. Wyse is one of my top 3 go to carriers in the Salisbury NC area. Prompt, courteous, and professional ALWAYS!"

CarrierSource Profile Link

What Else is Moving 🚚

Stolen Phones and Broker Liability 🏛️

A case involving RXO may impact broker liability law. The case stems from a shipment of cellphones brokered by RXO for PCS Wireless, which was stolen en route. The shipment, worth $11.5 million, was meant to travel from Texas to South Florida, but after the theft, PCS’s insurer paid $5 million, leaving the company seeking the remaining $6.5 million.

A key issue in the case is whether RXO acted as a carrier or broker for the shipment. This question could have significant implications for broker liability, which has been debated in several high-profile cases.

In past cases, courts have generally sided with brokers, finding they are not liable for accidents or thefts. However, the Ninth Circuit’s 2020 ruling in Miller v. C.H. Robinson suggested that brokers could be held liable under the Federal Aviation Administration Authorization Act (FAAAA), which has protected brokers in previous cases.

RXO has filed for sanctions against PCS Wireless, claiming that the company has been non-compliant in the discovery process. The dispute centers on PCS’s responses to a February 2024 order, which RXO argues were evasive and deficient.

PCS Wireless contends that RXO, as a carrier, should be held accountable under the Carmack Amendment, a law that establishes a national liability system for interstate shipments. If RXO is deemed a broker, PCS argues that it should still be liable for the actions of the carrier it hired, Wizard Equipment Corp.

This case will likely set a precedent for how liability is determined for 3PLs, depending on whether RXO is classified as a carrier or broker.

FREIGHT SNIPPETS ✂️

🦾🦿 AI-Powered Warehouse Robots | A robotics startup focused on AI-powered automation has raised $95 million in new funding, bringing its valuation to $1.65 billion. The investment, led by Lightspeed Venture Partners and Sumitomo Corp., brings the total funding for the company to nearly $300 million. Specializing in industrial robots for warehouse and logistics tasks, the company’s flagship robot, Mech, can lift 130 pounds and transport packages across warehouses. Using what it calls an “AI of AIs” approach, the company employs hundreds of Physical AI models that enable robots to load trucks, singulate parcels, and palletize for major logistics companies. It also works with notable players like FedEx and UPS. Read more.

🚛 Workflow Automation For Carriers | Transflo unveiled its updated Workflow AI for Carriers at the Truckload Carriers Association event in Phoenix. The solution automates document processing, reducing inefficiencies and human error. Workflow AI offers real-time visibility into operational metrics, tracks document activity, and improves cash flow management by cutting invoice lag by up to 80%. Read more.

🇲🇽🇨🇦 $134B In January | U.S. trade with Canada and Mexico reached $134.4 billion in January, showing an 8% year-over-year increase despite global trade challenges. Mexico led as the top U.S. trade partner with $69.61 billion in trade, up 7.8% from last year, while trade with Canada grew by 8.6% to $64.8 billion. China ranked third, with trade totaling $51.5 billion, a 7.6% year-over-year increase. Read more.

💰 Bank Fraud | The CEO of E-Freight Solutions Worldwide, LLC, a Georgia-based logistics company, has pleaded guilty to bank fraud and making false statements to the U.S. Department of Veterans Affairs (VA). Spencer Askew, 46, admitted to submitting false information to obtain financing and lying to federal agents. Askew, who founded E-Freight Solutions in 2010, later started Techknowlogi Holdings in 2015, a company with little business activity. In 2018, he misrepresented the nature of Techknowlogi's business to secure a $1 million line of credit from Vinings Bank. He also lied to the VA in 2020 about his ability to provide protective masks during the COVID-19 pandemic. Read more.

🚫🦾 Zero Touch Fulfillment | Locus Robotics showcased its Locus Array system at ProMat, an AI-powered solution for high-density storage and throughput. The system combines autonomous mobile robots (AMRs) with a vision-guided picking arm to automate induction, storage, and order retrieval with 99.9% accuracy. The robots can navigate tight spaces and handle multiple tote sizes for maximum efficiency. Read more.

🥷 GPS Thefts | Police in Chicago are investigating a string of GPS thefts from semi trucks, which have been happening in certain areas of the city for the past month. The thefts have taken place in the Gage Park, West Lawn, and Armour Square neighborhoods on the South and Southwest sides of Chicago. According to CBS, three men broke into a semi truck by smashing the rear window and removed the CPU/GPS device before fleeing on foot. Read more.

Pallets of News 🚛

Accelerating Level 4 Autonomous Trucks 🤖

Gatik has partnered with NVIDIA to integrate the DRIVE AGX in-vehicle compute architecture into its fleet of Class 6 and Class 7 Freight-Only (driverless) vehicles. This collaboration aims to accelerate the deployment of Level 4 autonomous trucks for major customers like Walmart, Kroger, and Tyson Foods.

The integration will use NVIDIA’s DRIVE Thor system-on-a-chip, which supports up to 1,000 trillion operations per second, enabling the autonomous vehicles to process AI-driven tasks with high precision.

Freight Trends Show Mixed Signals 📊

February data from Cass Information Systems showed a rebound in freight volumes, up 10.5% from January, although still down 5.5% year over year. This recovery was driven by normal seasonality, a rebound from January’s weather disruptions, and shippers importing goods ahead of tariff changes. Seasonally adjusted shipments increased by 4.9% sequentially.

However, uncertainty around trade policy looms over the freight market, and March, typically a strong month for demand, could see a decline of 3% to 4% year over year, according to the report.

The Truckload linehaul index saw its sixth consecutive increase in February, up 1.2% from January and 1.9% year over year, though still down 3.6% over two years.

The report highlighted uncertainty in the market but noted a potential silver lining for the for-hire freight sector, with private fleet capacity additions potentially increasing after a long downturn. A potential supply shock from rising tractor prices could push rates higher, especially if the USMCA exemption ends.

MEME OF THE DAY 😂