newsworthy
Third-party logistics (3PL) giant C.H. Robinson Worldwide Inc. took a giant
leap into the less-than-truckload (LTL) segment when it announced the purchase of Freightquote.com, a broker that generates most of its business from
smaller LTL shippers, for $365 million in cash.
Under the transaction, Freightquote will maintain its headquarters in
Kansas City, Mo., and Eden Prairie, Minn.-based Robinson said it plans to
significantly expand its operations there. Freightquote will keep its name and
operate independently of Robinson. Tim Barton, Freightquote’s founder and
executive chairman, will stay on as a consultant to Freightquote, Robinson
said in a statement.
Founded in 1998, privately held Freightquote has built its business around
an e-commerce platform that allows small to mid-sized shippers to access
multiple rate offerings, receive automated load acceptance confirmations,
and process payments. It has about 80,000 North American customers, most
of whom use the company for transactional services rather than for building
longer-term strategic relationships. Its calendar year 2014 gross revenues
are projected to reach $623 million, while its net revenues—revenues after
subtracting the cost of purchased transportation services—are expected to
hit $124 million.
LTL accounts for about two-thirds of Freightquote’s net revenue base, with
truckload transactions representing virtually all of the balance. Robinson
and Freightquote are nonasset-based providers, meaning they control no
transportation assets and rely on providers with equipment to move their
customers’ shipments. The two companies share some of the same LTL
carrier base.
John Wiehoff, Robinson’s chairman and CEO, told analysts in a phone call
that the transaction expands Robinson’s reach into the small to mid-sized
customer segment, a market he called “enormous.” Robinson’s focus has
been on a stable of large national accounts that it manages through strategic
relationships.
Robinson would prefer to grow organically and will only look at prospective acquisitions that offer a unique value proposition, Wiehoff said.
Freightquote presented Robinson with one of those external opportunities,
he said.
The bidding for Freightquote came down to Robinson and Greenwich,
Conn.-based XPO Logistics Inc. XPO is a fast-growing broker, expedited
transport provider, and freight forwarder that is emerging as Robinson’s chief
rival. Robinson acted in part as a defensive measure to keep Freightquote out
of the hands of XPO, which has been growing largely through acquisitions.
Wiehoff said on the analyst call that he was unaware of other bidders for
Freightquote. Bradley S. Jacobs, XPO’s chairman, president, and CEO,
declined comment.
The Freightquote acquisition will dramatically boost Robinson’s LTL net
revenue, which stood at $195.5 million through the end of the third quarter.
It will also add volume, scale, and density to Robinson’s LTL pipeline, ostensibly enabling it to exercise pricing leverage over LTL carriers.
For the first nine months of 2014, truckload services accounted for roughly
60 percent of Robinson’s total transportation net revenues. LTL, by contrast,
represented about 14 percent of its total net revenue during that
Robinson buys Freightquote.com;
takes big step into LTL
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has earned a Most Valuable
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Prevention Roundtable. … UPS
tractor-trailer driver Ginny
Odom has become the first
woman in UPS history to drive
40 years and more than 4 million miles without an accident.
… Clark Material Handling Co.
has received the 2014 Mid-Size
Manufacturer of the Year award
presented by the Kentucky
Association of Manufacturers. …
Holland, a provider of next-day
transportation, was honored as
one of the Less-Than-Truckload
Carriers of the Year by logistics provider M33 Integrated
Solutions. … Ann Drake, CEO
of DSC Logistics, received the
2014 Women Who Make a
Difference award given by the
International Women’s Forum.
… Marathon Data Systems’
CEO, Chris Sullens, was a finalist in the Executive of the Year
category in the 2014 NJBIZ
Business of the Year awards program. Marathon Data Systems
provides software-as-a-service
(SaaS) solutions for the field service, transportation, and logistics industries. … Peak-Ryzex,
a provider of supply chain and
mobile workforce solutions, was
named Partner of the Year by
Honeywell Scanning & Mobility.
… Transportation and logistics
service provider Logistics Plus
was named one of six finalists
for the DevelopErie Employer
of the Year award. … Third-party logistics service provider
Transportation Insight ranks at
the top of the Charlotte Business
Journal’s Fast 50 list, which honors the 50 private companies
in the Charlotte, N.C., metropolitan region with the fastest
revenue growth rates.
accolades
p. 22
