TransForce buys XPO Logistics' TL business for US $558 million

XPO Logistics Sells Truckload Operations to TransForce

Photo: XPO

XPO Logistics Inc. (NYSE: XPO) announced Thursday that it has sold its truckload business to Canada's growing trucking concern TransForce Inc. (TSX: TFI) for approximately $558 million in cash.

After XPO bought Con-way Inc. a year ago, Con-way Truckload's operations appeared to many observers to be an odd fit for XPO, which bills itself as the second largest freight brokerage provider in the world.

In February, the Wall Street Journal reported that after evaluating and rejecting bids from three trucking companies, XPO would instead hold onto the unit. "I think we can improve it by integrating it and bringing it lots of new customers from our other service lines,” CEO Bradley Jacobs told a WSJ reporter.

Then TransForce approached XPO about a deal, according to the Wall Street Journal in an article Thursday.

The company said it will use the proceeds from the transaction to pay down debt. It has some $5 billion of outstanding debt after making more than a dozen acquisitions since 2011, including French logistics firm Norbert Dentressangle.

The divested truckload operation encompasses approximately 3,000 tractors, 7,500 trailers and 29 locations.

“TransForce is getting the 19th largest asset-based truckload carrier in the U.S., a highly experienced workforce, and a presence in the cross-border Mexico freight corridor," Jacobs said. "We divested these assets to concentrate on growing our value to customers in the areas where we're leaders in the industry: contract logistics, truck brokerage, less-than-truckload, last mile, intermodal, drayage, expedite and managed transportation.”

TransForce said in its announcement that the acquisition, being made by a wholly owned subsidiary, "represents an important expansion of TransForce's truckload and logistics services across North America,"

Canadian publication The Globe and Mail noted that "TransForce has long searched for an acquisition that would accelerate its trucking presence in the United States to complement ...Read the rest of this story

Lights Tell Drivers If Fifth Wheel is Coupled to Trailer

A redesigned automatic lighting system for fifth wheels will soon be available from SAF-Holland, which says its ELI-te electronic lock indicator will help drivers ensure a proper coupling when they hook onto trailers.

The ELI-te Fifth Wheel Coupling Indicator includes white LED lights for the jaws-king pin area of the fifth wheel, red LED warning lights, and a long-life, application-specific electronic control module, said Bryon Redecker, product manager. The system is self-contained except for a power cord that must be fitted to a tractor's electrical system.

It is replacing a version introduced about 15 years ago that has links to an in-cab indicator system. For various reasons that product has not been popular, Redecker said.

Miscouplings sometimes cause kingpins to slip loose from fifth wheels and trailer noses to fall onto the ground as a tractor pulls away. Major fleets have told SAF-Holland that hundreds of instances of dropped trailers occur each year.

Drivers working with the ELI-te receive simple, immediate, and actionable feedback after each coupling. When a trailer kingpin is properly coupled to an ELI-te equipped fifth wheel, four high-intensity white LED lights mounted within the fifth wheel automatically illuminate the lock jaws. Drivers can then verify that jaws have locked onto the kingpin.

If the coupling is not successful, red LEDs, one on each side of the fifth wheel, begin flashing as a warning to the driver. 

If the coupling is not successful, the white lights stay dark and outward-facing red lights begin flashing. A driver can then find out why the coupling is not complete. A successful retry will turn off the red lights and illuminate the white lights. After a recheck, the driver can hook up air and electrical lines, finish a pre-trip inspection of tractor and trailer, and be on his way.

The enhanced ELI-te is an integrated option on Holland's ...Read the rest of this story

Look Ahead: 2017 Economic Forecast

Sunteck and TTS Merger Forms $1 Billion Multimodal Company

Third-party transportation and logistics providers Sunteck Transport Group and TTS Holdings have merged to create a single $1 billion dollar company.

The merger will create what the two companies say will be one of the largest multimodal, agent-based freight management service providers in the U.S. Combined, the new company should approach 1 billion in gross revenue and manage more than 700,000 intermodal, truckload and less-than-truckload shipments annually.

Ken Forster, current CEO of Sunteck, will serve as the president and CEO of the new company and Andy Cole, current president and CEO of TTS, will serve as chairman of the board.

“The merged companies reflect an increased level of commitment to our agent business model, enhancing the level of innovative, customized solutions for the shipper community,” said Forster. “The resulting company and our agents will be well-positioned to lead the industry in serving shippers facing an increasingly complex regulatory, technological, and economic environment.”

Sunteck/TTS Holdings will have a combined network of more than 30,000 carriers as well as a collective 2,000 trucks in its direct asset-light capacity divisions. TTS's direct intermodal program will be complimented by Sunteck's large intermodal drayage network.

“We believe the combined entity will be the platform of choice for agents and 3PLs looking for industry-leading technology, multimodal solutions, and an extensive network of both in-house and outsourced capacity,” Cole said. “This merger with Sunteck only furthers our goals for agent success, with increased potential for expanded service offerings for our agents to utilize expanded solutions for their clients.”

Related: 3PL Segment Growing 2-3 Times Faster Than GDP

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Earnings Watch: YRC, Universal Truckload Post Smaller Profits

Earnings for the parent of the mainly less-than-truckload carrier YRC Freight and others turned in a smaller third quarter numbers late Thursday while one logistics operator also reported its profit is down from a year ago.

YRC Worldwide Inc. (NASDAQ:YRCW) net income fell to $16.2 million, or 42 cents per share, two cents less than one consensus estimate from analysts. This compares to net income of $17.9 million, or 61 cents per share a year earlier.

Revenue for the most recent period totaled $1.22 billion, down from $1.24 billion in the third quarter of 2015 as operating income also moved lower to $38.8 million from $47.7 million.

"Our third quarter 2016 financial results were impacted by the soft industrial backdrop and lower fuel surcharge revenue compared to a year ago," said James Welch, CEO. "Year-over-year tonnage per day was down during the quarter although it was the smallest decline at YRC Freight and the regional segment in several quarters. We continue to believe pricing discipline in the LTL sector remains steady despite the near-term headwinds.”

YRC Freight improved its reported operating ratio by 60 basis points to 97.3, according to the Kansas-based company. The improvement at YRC Freight was more than offset by a decline of 250 basis points at the regional segment with a reported operating ratio of 95.1 for third quarter 2016.

Third quarter tonnage per day decreased 1.3% at YRC Freight and 1.5% at the regional segment compared to third quarter 2015.

At YRC Freight, excluding fuel surcharge, third quarter 2016 revenue per shipment increased 1.3% and revenue per hundredweight increased by 0.3% when compared to the same period in 2015. Including fuel surcharge, revenue per shipment decreased 0.4% and revenue per hundredweight decreased by 1.4%.

For the regional segment, excluding fuel surcharge, third quarter 2016 revenue per shipment increased 0.3% and revenue per ...Read the rest of this story

SAF-Holland expands lineup, pledges more to come