Over the summer, two prominent FreightTech companies have quietly become entangled in a fight in a Delaware court about the meaning of the seven-figure, multiyear services agreement they signed in 2023 .
Arizona-based MyCarrier, which provides transportation management, booking and quoting software for shippers using less-than-truckload services, and Chicago-based project44, a leading visibility solutions provider, were close allies for years. MyCarrier’s rate quoting and freight booking technology were built to run on project44’s ecosystem. But the relationship is now strained and on the verge of becoming adversarial.
Although the filings in Delaware’s Chancery Court that FreightWaves has seen are from June and July of this year, the story begins in October 2023, when MyCarrier and project44 signed their “Amended and Restated Master Services Agreement,” the document governing the deep partnership between the two technology companies. Many of the legal documents are confidential, and the ones that are public have been heavily redacted, but it’s possible to sketch out the basics of the dispute. The contract stipulated that project44 would provide MyCarrier with API technology and visibility so that shippers using MyCarrier’s platform could send and receive information from their LTL carriers, but only under certain conditions.
One of those conditions was that MyCarrier would build products with the same or similar functionality as products offered by project44.
On June 18, 2024, project44’s law firm, King & Spalding, wrote a letter accusing MyCarrier of violating their agreement by developing a stand-alone eBoL product, and threatened to cut MyCarrier off from project44’s visibility data and API platform if a satisfactory response was not received by the end of the day.
MyCarrier disputed that it had built any technology that was competitive with project44 and said the eBoL features it had launched were only for specific customers and were integrated into the platform they were already using — in other words, they weren’t “stand-alone.” That answer didn’t satisfy project44, which reiterated its threat to cut MyCarrier off if it didn’t disclose details about its eBOL technology (but also said it wouldn’t cut off MyCarrier just yet).
According to MyCarrier’s complaint, project44 wouldn’t promise to give MyCarrier advance notice if it did cut the company off, and MyCarrier said it couldn’t function under that kind of threat and would have to file for a temporary restraining order.
MyCarrier wrote: “A termination of the Services by p44 would cause MyCarrier immediate, irreparable harm. MyCarrier’s platform would cease to function; all communication by MyCarrier or shippers to carriers would be cut off. With zero ability to communicate electronically with the carriers, all business would stop. Further, shippers and carriers would lose all access to crucial information about shipments in every stage of the shipping process.”
After more back-and-forth between MyCarrier’s lawyers at Goodwin Procter and project44’s lawyers at King & Spalding, on June 30, MyCarrier filed a motion in Delaware Chancery Court requesting a “temporary restraining order enjoining Defendant project44, LLC (“p44”) from suspending MyCarrier’s access to services which p44 agreed to provide MyCarrier pursuant to a contract between the parties.”
On July 19, project44 responded with a motion opposing the temporary restraining order, arguing that MyCarrier executives were “manufacturing a crisis” and accusing them of secretly developing APIs and eBOL technology in bad faith and knowing violation of their master services agreement’s No Build-Behind Restrictions. Project44 also filed for a Preliminary Injunction hearing with immediate discovery so they could determine whether MyCarrier was violation of the contract or not because, project44 said, MyCarrier had not produced any documents or information to confirm this.
Project44 wrote: “Although MyCarrier has been, and continues to be, subsidized by p44 with steeply discounted pricing in exchange for these restrictive covenants, behind p44’s back it was working to develop products, services, or APIs that would eventually allow MyCarrier to work directly with its clients and disintermediate p44 from the supply chain. If MyCarrier wanted to eventually disintermediate p44, it could have forgone the build-behind clauses, but then p44 would have charged it market rate. In fact, this approach was discussed by the parties [but] ultimately rejected by MyCarrier. What MyCarrier was trying to do before it was caught (and is still trying to do) is have it both ways: benefit from p44’s subsidized rates while cutting p44 out of this market.”
Much of the master services agreement language quoted in the complaint and response has been redacted.
Project44 asked the court to deny MyCarrier’s motion for a restraining order but asked that if it were granted, MyCarrier be required to post a substantial bond (the amount was redacted), “due to the significant harm that p44 will face if it is forced to continue to subsidize MyCarrier’s business during the period of time before the parties’ dispute is resolved in p44’s favor.”
In a statement to FreightWaves, MyCarrier reiterated its commitment “to the digitization of the Less-than-Truckload (“LTL”) industry and to the service of our Carrier and Shipping partners, including over 16,000 active users. We take our responsibility of serving our partners seriously and will judiciously defend any potential action which could impact their ability to effectively move freight throughout the country.”
“MyCarrier always has and will continue to operate in a collaborative and open manner with all of our partners. We look forward to a timely resolution of this matter and will continue to prioritize the operations of our Carrier and Shipping partners,” says Michael Bookout, Chief Executive Officer of MyCarrier.
MyCarrier stated that it had “taken the appropriate actions to avoid disruption to its services and has initiated arbitration in this matter. MyCarrier’s position is that project44’s threats were improper and in violation of the parties’ agreement. project44’s immediate threat to terminate services has been addressed by the Court. MyCarrier is confident that the parties’ disagreements will ultimately be addressed in favor of MyCarrier.”
Project44’s General Counsel, Jennifer Coyne, also gave a statement to FreightWaves explaining their view of the matter—that project44 sent MyCarrier a cease and desist letter in June after it received information that MyCarrier might be in violation of its No Build-Behind clauses, and that MyCarrier chose to seek a Temporary Restraining Order instead of providing requested documentation of the APIs and eBOL technology it was building. Coyne noted that the Chancery Court of Delaware didn’t grant MyCarrier’s restraining order, but asked for “robust documentation,” and then at a hearing on August 6, ordered both parties to engage in a formal discovery process.
Coyne wrote that that she wanted to “emphasize project44’s commitment to ensuring continuous service to the MyCarrier LTL community and assure FreightWaves that it does not intend its efforts to enforce its contractual rights to ultimately result in any interruption to either MyCarrier or project44’s customers. This was a unique contract provision between the parties due to a historical relationship and subsidy by project44 of MyCarrier for many years, and the Services provided to MyCarrier are unique to its relationship with MyCarrier and does not impact any other of project44’s customers.”
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