Major acquisitions made this year
This year has seen some major mergers and acquisitions involving fleets of all sizes.
Some of the biggest ones include:
To strengthen profitability and stabilize its business after a challenging 2023, UPS (CCJ Top 250, No. 2) announced in June that it would sell Coyote Logistics to RXO, Inc. for $1.025 billion. . That’s a far cry from the $1.8 billion UPS spent to acquire Coyote Logistics in 2015. Executives have previously cited overcapacity in the market as causing ongoing problems. With this transaction, RXO continued to provide brokered transportation services for UPS under the contract through January 20230. The combination of Coyote Logistics and RXO’s existing strengths creates the third largest intermediary transportation provider in North America. Rider Systems acquired Concord, N.C., in February. Cardinal Logistics, based in , is a provider of dedicated fleet services, including last-mile delivery and contract logistics services, as well as complementary freight brokerage services. Cardinal primarily serves the consumer packaged goods, omnichannel, grocery, building products, automotive and industrial sectors. In July, Knight Swift acquired Los Angeles-based regional LTL carrier Dependable Highway Express. This is a move to strengthen Knight Swift’s West Coast LTL business and Dovetail. It will partner with Knight-Swift’s existing AAA Cooper and Midwest Motor Express businesses to provide coast-to-coast service. Terms of the deal were not disclosed, but Schneider National agreed last month to buy Baltimore-based Cowan Systems and its affiliates for $390 million. The deal is expected to be completed by the end of the year. Upon completion of the acquisition, Cowan Systems will operate as a wholly owned subsidiary of Schneider.
–
International Warehouse Navistar Named in Business Transformation Initiatives
Navistar, the parent company of International Trucks and IC Buses, has adopted a new name that pays homage to the company’s origins. The move was designed to complement its strategy of establishing itself in the domestic commercial truck market, as well as being a complete solution provider, including products, financing, connectivity, parts, maintenance and vehicle charging.
The name change includes the launch of the My International digital interface, which integrates digital tools such as OnCommand Connection and International 360 service communication tools.
Dan Kaiser, International’s executive vice president of commercial operations, said International is focused on bringing new Class 8 products to market.
–
Supply chain disruptions and natural disasters created market opportunities
The short-lived Eastern and Gulf Port strikes presented an opportunity for spot market carriers. Meanwhile, spot cargo volumes increased as shippers engaged in Hurricane Helen cleanup efforts and demand for flatbed capacity increased, in part due to the impact of port strikes.
–
fedex cargo
FedEx separates LTL business
FedEx announced that it will spin off its less-than-truckload cargo transportation business, FedEx Freight, into a separate publicly traded company. Expected to close within the next 18 months, FedEx Corp. executive vice president and chief customer officer Bree Carrere said the move will give the new company “an opportunity to strike out” and explore additional LTL business. He said he could.
This move makes FedEx a significant competitor in the LTL industry. Raj Subramaniam, president and CEO of FedEx Corporation, said now is the “right time” to focus on “the unique dynamics of the LTL market.” In a conference call with analysts, he noted that this development will make FedEx Freight the leader in pure LTL business and the largest airline by revenue with the broadest network and fastest transit times.
FedEx Freight’s fiscal year 2024 revenue was $9.4 billion, representing approximately 12% of FedEx’s total revenue of $78.3 billion.
–
Cost control and cost growth continue to challenge businesses
The American Institute of Transportation’s annual Trucking Business Costs Report shows consistent increases for three consecutive years. After increasing nearly 40 cents in 2022, operating costs per truck mile increased by another 2 cents in 2023, bringing the average operating cost to $2.27 per mile.
Fleetworthy research also shows that compliance costs are the biggest challenge for motor carriers when it comes to compliance, safety, and management-related activities. 96% of respondents reported cutting costs in other areas of their business in the past 12 months to cover compliance-related costs.
On a different note, a report from the American Trucking Associations Technology and Maintenance Council and Decisive found that large parts and labor costs continue to decline. Although these declines slowed in the second quarter of this year, the cost reversal is a positive development as repair and maintenance costs rose 3.1% last year to $0.202 per mile, according to ATRI research. Ta.
Dick Hiatt, president and CEO of Decisiv, said fleets and service providers are regaining predictability and enhancing their ability to more effectively plan the allocation of service costs.
Pamela de Leon is a senior editor at Commercial Carrier Journal. An avid reader and travel enthusiast, she loves hiking, running, and is always on the lookout for a good cup of chai. please contact her (email protected).
