ITS Logistics, the broker that tried "offsetting" its way out of $85,000 in payments on uncontested, claim-free loads hauled by 350-truck Illyrian Transport, emerged at least partially successful after the dispute over a cargo-theft scam.
Since covering the original dispute in detail (read all about it here), Overdrive learned the final settlement amount: $45,750, just about 53% of the total amount in question.
Because Illyrian ran regular postal loads for ITS, the carrier was accustomed to regularly auditing the payments and periodically settling short pays with ITS.
At the time ITS got duped on a load of Continental tires that it handed over to a carrier it thought was Illyrian, ITS owed Illyrian about $11,000 in short pays.
Adding the $11,000 owed to the original amount, $85,190 for 62 loads of mail hauled by Illyrian -- the real Illyrian, not a cargo-thieving, double-brokering hacker -- the $45,750 comes to just 47% of what ITS might have rightfully owed.
Following publication of Overdrive's Jan. 22 story about the dispute, a party with knowledge of the settlement amount got in touch.
Jennifer Chrestman, head of Freight Recovery Specialists, the transportation-specific debt collection firm that handled the dispute for Illyrian, said she'd wished the carrier had more appetite to fight.
"I see why ITS wanted no dirt on them, since Echo was buying them," Chrestman said, referring to Echo Global's acquisition of ITS Logistics just days after the early January settlement.
"The settlement encompassed this claim and some short pays that were the fault of the broker/shipper/receiver, like assigning the trailer late and making the carrier late," she said. "It resulted in wiping everything clean for fresh start going forward."
Chrestman contends that since ITS never showed a rate confirmation signed by Illyrian, since Illyrian's name wasn't on any of the paperwork for the stolen load of tires, and since neither ITS nor the shipper did anything to vet the ID of the carrier that picked up the stolen load, Illyrian would have won the full amount in court, perhaps including legal fees, too.
ITS Logistics and its new owner, Echo Global, contacted by Overdrive, have not provided comment on the specifics of the case.
"I will say that I personally would not have settled because I feel like we had the stronger case with the surety bonds not paying [Illyrian's claims on uncontested, unpaid loads] and the fact that Illyrian's name was on none of the [stolen load's] paperwork," she said.
Ultimately, the dispute shows how much power a broker can hold over a carrier, even a sizable one like Illyrian. By including language allowing "offsetting" in its contract and using it to cover claimed liabilities on a stolen load that Illyrian never even touched, the broker saved about $40K.
In a shaky market, what kind of incentive is that for brokers?
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