A nasty legal skirmish between load board operator DAT and one of its former customers, Convoy, has the characteristics of a classic corporate divorce: betrayal, mistrust, financial gain and loss, and profound differences of opinion.
What is known is that DAT, by far the trucking industry’s largest and most influential load board, in January sued Convoy for allegedly misappropriating DAT’s data and “trade secrets” to build a competing load board, Convoy for Brokers. DAT wants the court to permanently shut down the Convoy load board, which remains operational.
Convoy’s actions, DAT charged in the suit, breached provisions of their contract, which barred Convoy from working to establish its own load board during the contract’s three-year term, which ended in early November.
Convoy’s legal rights extended only as far as using the load board to connect its shippers and the carrier base, DAT said in the filing. It did not carry over to building its own load board to attract other brokers, it added.
Convoy became a DAT customer in 2016, and the two renewed their contract two years later. Until late last year, Convoy used the DAT load board to match shipper loads with carrier capacity.
Convoy publicly announced the launch of its load board in mid-November, about two weeks after DAT declined to renew its contract with Convoy. DAT took the action, according to its filing, after discovering that Convoy was creating its own load board.
DAT said in its filing that Convoy had been building the platform as far back as 2020 while the contract was still in force. DAT’s evidence is based on language in Convoy’s Nov. 18 press release in which it said the load board launch was the “result of more than a year” of effort.
In a response filed in mid-June, Convoy argued that no company, regardless of market position or circumstances, can block another from pursuing its own commercial endeavors. DAT effectively weaponizes contractual noncompete agreements to keep freight brokers captive to its platform by threatening to pull access to its load board and the carriers that use it, Convoy said.
No one denies the reach of the DAT load board. As of January, nearly 900,000 loads were posted to it each business day. Since its launch in 1978, the DAT load board has supported about $110 billion in spot market transactions.
DAT is typically the first choice for spot market transactions. In addition, millions of loads are posted only on DAT, making it, in practical terms, the sole option for shippers, brokers and carriers.
DAT, Convoy said in its filing, is a “monopolist” that writes language into its contracts openly directing others not to compete with it. DAT’s behavior presents broker customers like Convoy with an “untenable choice” to either accept the status quo or lose a critical source of capacity, Convoy said.
Convoy said it strongly denies DAT’s allegations that it misappropriated DAT’s data or trade secrets to build its load board. It has not commented publicly on the timeline for when the work began.
Sources close to Convoy said DAT’s allegations are legal “red herrings” that obscure its main intent of blocking any competition. The sources expect DAT to act aggressively in attempting to thwart Convoy.
Neither DAT nor Convoy would publicly comment beyond the court filings. Both sides are asking for unspecified monetary damages, which would be determined at trial, if it gets that far.
The case, which has been filed in federal district court in Oregon, has been in legal pingpong since Convoy filed a motion in March to dismiss DAT’s suit. Each side has filed opposing motions since then. The latest turn comes Aug. 26 when Convoy is expected to file a motion opposing DAT’s motion to dismiss Convoy’s June claim.
