Approximately 65 employees for Pittsburgh-based Elite Transit Solutions were laid off via Microsoft Teams on Friday. This is the second round of job cuts the freight brokerage has experienced over the past month; about 20 employees were let go on Oct. 20 because of the “current economic situation,” according to sources familiar with the layoffs.
One former employee who was fired on Friday’s call told FreightWaves that Elite Transit Solutions’ CEO Michael D. Johnson didn’t allow workers to submit questions using the chat function and muted their microphones so they weren’t able to ask questions. After the call ended, their computer access was cut.
“We all had questions about when we would get paid for working these last two weeks and if we would get paid for our vacation time we had accrued,” the ex-employee, who asked to remain anonymous for fear of retaliation, told FreightWaves. “We were told to email human resources if we had any questions, but our [vice president] of HR left a day before we found out our jobs were being eliminated. Who is left to respond to our emails?”
Melissa Bucci, former vice president of people and culture at Elite Transit Solutions, confirmed the layoffs via LinkedIn on Friday, stating that she was sorry she didn’t “have an opportunity to say goodbye.”
At its peak, the company had around 140 workers, another source familiar with the layoffs at Elite Transit Solutions told FreightWaves, but is down to around 10 people, including Johnson.
Headquartered in Pittsburgh, Elite Transit also has offices in North Carolina, Chicago and Arizona.
The company hasn’t announced it is ceasing operations and is in “talks with another freight brokerage about a possible merger,” according to multiple sources.
“At this point, we aren’t sure what is true and what is not, but the writing has been on the walls for months that Elite hasn’t been doing well and is struggling to secure financing and pay carriers,” the source said.
While Johnson, who founded the logistics company in 2013, initially agreed to speak with FreightWaves about the ongoing financial situation at Elite Transit Solutions, he later declined to comment.
Some carriers haven’t been paid since May
One former employee said he became aware of Elite Transit Solutions’ shaky financial situation soon after he was hired. He said nearly 80% of the inbound calls were from trucking companies that hadn’t been paid for loads they hauled for the brokerage since May or June. They were instructed to transfer the calls to the billing department, which went to voicemail, but claimed that no one answered the phones.
“We were cut off by almost every factoring company you can think of,” the ex-Elite Transit employee told FreightWaves. “It got so bad that the factoring companies were taking money back from the carriers because the contract was between the factoring company and the carrier, not with Elite.”
“We heard from carriers that were forced to close their trucking companies, including one that had to sell his business and his home, because we hadn’t paid him,” the source said. “We received an email from the wife of a carrier owner whose husband attempted suicide and blamed Elite for not paying him.”
Carriers have been posting warnings about payment issues with Elite Transit Solutions since May.
Elite Transit Solutions also urged independent trucking companies to use its “preferred factoring partner,” Connect Capital LLC, headquartered in Miami, writing on its website that “in most cases, Elite drivers get paid in less than 24 hours.”
The business address for Connect Capital is listed as a townhome which was purchased by Johnson for nearly $2.2 million in March 2022. Johnson, who is listed as the only authorized member for Connect Capital. The Florida secretary of state’s office filed to have Connect Capital administratively dissolved for failing to file an annual report in September.
“Why did they continue to hire people knowing they were on shaky ground,” the source said. “These recent layoffs have put the livelihoods of several people and their families in jeopardy.”
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Nelsie R Odoya
Start writing to US congress and senate to regulate all loads from shipper into one system portal and eliminate
brokering
Joe Sunday
These are the situations that cause some nut to storm the broker’s office or home. It only takes one to make the headlines. Kind of like the Dick Simon driver that stormed the building in CA, or the driver that shot up the TRL office person in PA. When screwing the truckers for money, these brokers are living dangerously in my opinion. Most of these truckers are dedicated to their work but are living hand to mouth and have little patience. They don’t understand not getting a fair shake.
Ke
The entire concept freight brokers should be eliminated.
The companies should be able to negotiate rates directly with the shippers.
Eliminate the so-called middle man.
There is no earthly reason for the existence of freight brokers.
They do nothing .
Get rid of them.
Robert
Good Day,
Just think a broker who can go/get into the business for fractions of what a carriers cost is, can also put a carrier in “time-out” via, carrier 411; how on earth is this logical? This is backwards and needs to be addressed asap!
I also find it difficult to understand how brokers are going broke and not paying the carriers, after all they hold most of the cards, right. The brokers go to the shippers and bid, and of course underbid other brokers, I am curious when the brokers thought they might have an issue? All of this seems from a logical standpoint that a person would only have one logical answer, the brokers do not have a clue what it takes from a financial perspective to sustain. Please keep in mind I didn’t say (profitable) I said (sustain), how on earth do we expect a carrier to be able to sustain their business, if the “executives”, themselves who CONTROL the money cannot stay in business.
I will again close with my opening statement, how can a broker or executive who controls the purse strings, who cannot control their own business have any clout to refer or put a carrier into carrier 411? Some may think I have an issue with carrier 411, the answer is no not at all. With that said I am trying to make my point that just because an executive says a carrier is “bad” doesn’t necessarily mean they are, right?
It really comes down to this, we as an industry are saying that a brokers word means more than a carriers. I’ve heard of carriers being put on carrier 411 for literally calling the broker and cancelling a load, how on earth is this possible or warranted?
What is a carriers recourse pertaining to broker abuse?
I am certainly happy I am on my way out of this industry as a carrier, I tell folks all all the time, trucking just is not worth the time anymore. I believe many more are starting to see that the reward for the sacrifice just isn’t there any longer. The industry is going to really have issues in the coming years, once the mega-carriers and larger companies start walking back the per mile pay for company drivers, then maybe folks will start to understand and many executives should look in the mirror.
Stay safe
Lester
I send this advice to carriers; in case you are not aware of the law. If you are not paid by a broker, you may bill the shipper and consignee. They are required by law you pay the carriers if a broker does not.
Phillip Johnson
Owner operators are the biggest reason the industry supports scammers like these. Total scab decimation, unionize or keep working for free.