Six Carriers Sue C.H. Robinson and TQL Under RICO Over Freight Pricing

0:01Hi, I'm Kelly Barner and this is the Art of Supply Podcast. Every business story has a supply chain angle, and those stories deserve to be told. This show digs deep into news headlines and interviews thought leaders, executives, and newsmakers to capture their perspective in their own words. With no agenda to lead us in any particular direction, we'll offer you objective coverage of geopolitics, innovation, and competition. Facts will always take precedence over hype. The rest is up to you. Is a low price evidence of a crime or just healthy competition? How about$1.60 a mile? That's how low some total quality logistics loads were posted at, according to a lawsuit filed in September.

0:57Now, the actual average cost to run a truck in 2025 was$2.33 a mile, according to ATRI. So how did TQL offer that low rate? Six trucking companies say there is only one way to haul freight that cheap, by breaking the law. So they sued two of the biggest freight brokers in the country, C.H. Robinson and TQL, under the RICO statute, the same law prosecutors use to go after the mob. In this episode of Art of Supply, I'll cover what six family-owned carriers are accusing C.H. Robinson and TQL of, and why they reached for a racketeering statute to do it, how the brokers are firing back, including the argument that the plaintiffs just lost to a lower bidder, and why the whole case may hinge on a 2006 Supreme Court decision about a steel supplier and unpaid sales tax.

1:57So first, let me give you a quick refresher on what RICO is and what it isn't. RICO stands for the Racketeer Influenced and Corrupt Organizations Act. It was signed in 1970 as part of a law aimed at organized crime getting its hooks into legitimate businesses. The basic idea is that if someone runs an enterprise through a pattern of racketeering, which means at least two related crimes, they can be held responsible for the entire operation, not just the individual acts. The crimes that count are called predicate acts. In this case, the plaintiffs are relying on two, wire fraud and forced labor.

2:40Now there's a criminal version and a civil version, and this case is civil. A business that's been hurt can sue and collect three times their losses plus attorney fees. So even though we're talking about mob-associated regulations, don't worry. Nobody in today's episode is going to sleep with the fishes. So who is suing who, and what exactly are they saying the brokers did? So the plaintiffs are six carriers, Stevens Trucking, Western Flyer Express, Freymiller Trucking, IWX Motor Freight, Christensen Transportation, and EOS. They filed on September 23rd in federal court in the Eastern District of Texas.

3:24There are four RICO counts plus a false advertising claim under the Lanham Act. Now, here's how the alleged scheme worked. The brokers would win shipper contracts by promising safe, compliant transportation. Now, because brokers don't own or operate their own trucks, they then go hire carriers to haul the loads in the contracts they want. And they keep the difference between what they were paid to find carriers and what the carriers charge them to move those loads. The accusation is that they handed the loads to carriers that cut their costs by breaking the rules, with falsified logs, drivers running 20 or more hours a day, shuffled DOT numbers, and very thin insurance.

4:10As reported by CDL Life, quote, TQL and C.H. Robinson set the price and illegal carriers accepted those bargain basement bids, often with no questions asked. The plaintiff's claim broker margins went from 5 % to 8 % before 2021 to 15 % to 20%, while shippers weren't paying any more than they had in the past. One carrier says C.H. Robinson undercut them by at least 15%, and the lawsuit argues, quote, the only way the bid could be undercut by this much is through the use of illegal carriers and forced labor. Now that point is key to this case. That low price point is being offered as proof of wrongdoing.

5:00Then there's the carrier network at the center of the complaint. Superego is not a defendant, but they are the plaintiff's main example of what they refer to as an illegal carrier network. The complaint alleges superego runs through more than 70 related carriers with more than 3 ,000 recorded safety violations and 266 crashes. C.H. Robinson named Super Ego its 2025 Carrier of the Year in the 1 ,000-plus truck category. Two Super Ego entities, Sam Express and Two Tash Express, allegedly also received TQL elite carrier recognitions. Now, one unnamed former driver describes the network like this, quote, the only variation is the name on the door.

5:53A screenshot that was included in the complaint appears to show a carrier offering a driver an extra$100 to avoid weigh stations. The plaintiffs attribute that act to the carrier, not to C.H. Robinson or TQL. Now, if this all is starting to sound like a front operation out of a mob movie, then the plaintiffs have achieved their mission with this complaint. Then there's the damage they say they've taken. Freymiller says they identified over$51 million in lost sales across 63 customers. Christensen says their revenue fell from$71.3 million in 2023 to under$50 million in 2025. Their attorney, Trey Duck of Knicks-Patterson, put it this way, quote, TQL and C.H.

6:44Robinson have lined their corporate pockets by cutting corners and selling the safety of American roads to the lowest bidder. Now that's their side of the story. The brokers are pushing back, saying no one sets the price but the market. C.H. Robinson's chief legal officer, Dorothy Capers, has rejected the allegations outright, and she went straight at the pricing argument. As I said, she repeated, quote, no freight broker sets rates, the marketplace does. C.H. Robinson says carrier choice depends on proximity, size, equipment, certifications, and customer requirements, not just price. And they plan to pursue counterclaims.

7:29On Super Ego specifically, C.H. Robinson says each carrier had its own federal operating authority and was in good standing with the FMCSA at the time, but that, quote, Super Ego carriers are no longer part of our network. Now, they don't say giving the carrier an award was a mistake. They say the paperwork was in order at the time. When C.H. Robinson reported third quarter earnings on October 28th, the lawsuit didn't come up at all. Instead, CEO Dave Bozeman told analysts the market is shifting volume, quote, to larger brokers with significant insurance coverage and strong carrier vetting processes.

8:13The plaintiffs say C.H. Robinson's carrier choices are part of a racket. They, on the other hand, are telling Wall Street those same choices are why they are winning freight contracts. TQL has filed a response, and they put that response in on October 19th. Their framing, in one sentence, is, quote, Stripped of its rhetoric, this is a dispute about plaintiffs losing freight to a lower bidder, the likely result of their poor business practices. They did not go on to detail what they think those poor business practices are. TQL also points out that at least half of the plaintiffs are themselves licensed freight brokers with FMCSA.

8:57So in other words, they know how this all works. One more detail is important here. TQL says that four of the plaintiffs signed carrier contracts agreeing to litigate any dispute in state court in Claremont County, Ohio, which is in TQL's backyard. If the judge agrees with that part of TQL's response to the complaint, this case will leave federal court in Texas before anyone argues about whether a low price is a crime. There is also an uncomfortable detail in the plaintiff's own records. Matthew Leffler, the armchair attorney, and an adjunct law professor at Michigan State, pulled 24 months of FMCSA data on all six plaintiffs.

9:45Their driver out of service rates are strong, between 0.6 % and 1.5%, against a national average of about 6.7%. But their vehicle maintenance is another story. Stevens, Western Flyer, and Christensen run in the mid to high 20s, and EOS is around 33%. Now compare those to a national average, around 22%. Now nobody is accusing these carriers of anything, but if your whole case is that the other guys went on price by cutting corners, you have to expect your inspection records to be read very closely. So let's now return to the core question here. Can a low price serve as evidence of a crime? Matthew Loeffler's first reaction on X the week after the filing was, quote, spoiler, that's not how Rico works.

10:42To win, these plaintiffs will have to show that they were hurt by reason of the racketeering. Not that it happened somewhere in the market, but that it directly caused their losses. That's where the 2006 Supreme Court case comes in. Anza versus Ideal Steel Supply. Ideal Steel sued a competitor that allegedly wasn't charging New York sales tax on cash sales. They said that let their rival charge less and take its customers. The Supreme Court said Ideal couldn't recover their damages under RICO. The direct victim of the tax fraud was the state, not the competitor. The lost sales were simply found to be too indirect, and there were too many other factors that could also explain why customers chose the cheaper shop.

11:33Justice Kennedy wrote that RICO requires a direct link between the illegal act and the injury. So you can probably see where this is all going. Matthew Loeffler argues that the parallel is plain. If the alleged crimes happened, the people most directly hurt are the drivers, the shippers who were misled, and the public. The carriers' lost bids sit further down the chain. TQL is already making a version of the same argument that the plaintiff's aggregate losses, quote, do not identify which injury was caused by the asserted TQL statutory violation. He expects an early motion to dismiss based on Anza.

12:17The RICO counts could fall, but the false advertising claim might just survive. His bottom line is this, quote, whether the case survives will turn less on how unsafe the disputed carriers may be and more on whether lost bids by rival trucking companies are the kind of direct injury RICO was written to cover. Now, the court may never have to answer our question. It may just decide these plaintiffs aren't the right ones to ask it. And none of this is happening in a vacuum for C.H. Robinson. In a completely separate case, a Dallas County judge on October 16th affirmed a huge verdict against C.H.

13:01Robinson over a fatal 2021 crash in Mississippi. With interest, that penalty is over$700 million. dollars. It's a different court with different plaintiffs and based on a different legal theory, but it's part of why every broker lawsuit is getting so much attention right now. So just to sum up, six carriers say C.H. Robinson and TQL won freight by handing it to carriers that broke the rules and that the price they were able to offer to the market proves it. The brokers say the market sets the price and that the carriers they worked with were federally authorized and that maybe the plaintiffs just lost out to a lower bidder.

13:47Before anyone decides whether cheap freight can be considered criminal, a judge will have to decide whether this case belongs in Texas or Ohio and whether these carriers were hurt directly enough to sue under RICO. The bottom line is that this case is a test of whether a racketeering law built for the mob can turn a market price into evidence of a crime in freight brokerage. The story is ongoing. C.H. Robinson hasn't even filed their response yet. Once they do, the judge will have to rule on TQL's Ohio venue motion. There is a real operating cost gap here. $1.60 a mile against$2.33. The question is whether it was achieved through wrongdoing, competition, or operational efficiency.

14:39Cheap freight isn't a crime in and of itself, but it might be evidence of one, and that is what the courts are going to have to decide.

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