Thread: XPO to keep truckload subsidiary, expand US-Mexico business

XPO to keep truckload subsidiary, expand US-Mexico business

William B. Cassidy, Senior Editor | Feb 08, 2016 5:11PM EST
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XPO Logistics is holding onto its truckload subsidiary, and will use the former Con-way Truckload to expand its cross-border business with shippers in the U.S. and Mexico, the company's CEO said Monday.

"We have decided to retain the truckload business as part of our integrated supply chain offering," Bradley S. Jacobs said. "We made that decision based on the value shippers place on owned truckload capacity, particularly cross-border U.S.-Mexico assets."

The decision to keep the truckload business ends months of speculation that it would be sold. XPO received three offers for the business before the ink was dry on its $3 billion agreement to acquire Con-way.

The truckload unit of Con-way was the 20th largest U.S. truckload carrier in 2014, with about $632 million in revenue, according to SJ Consulting Group data. At that point, the carrier had about 2,600 tractors and 3,200 employees, with headquarters in Joplin, Missouri.

"They're valuable to us strategically, and they've got a nice growth engine, because 35 percent of their revenue is from U.S.-Mexico trade," Jacobs said. In particular, the XPO truckload operation complements the logistics operator's cross-border intermodal business, he said.

"We also do a lot of expedited business into and out of Mexico, by ground and by air," Jacobs said. "There’s a lot of synergy between what the truckload division is doing cross-border and what the rest of XPO is doing. Customers want choices.

By having the ability to offer expedited and regular service by ground and by air, we really have all the bases covered."

Con-way bought the truckload operation, originally Contract Freighters, in 2007.

CFI was one of the first U.S. truckload carriers to create a Spanish-language website targeting cross-border business.

"There’s going to be increased (cross-border) activity for some time," despite concerns about the health of the U.S. economy, Jacobs said. Cross-border business "Is not completely immune to a U.S. recession, but it's resistant," he said.

Jacobs doesn't expect a recession this year, however. "We’re not hearing widespread predictions of recession from our customers," he said. "They're still planning for growth. Not huge growth, not robust growth, but nevertheless growth."

XPO has trimmed its less-than-truckload network, however, closing seven small terminals Jacobs said were not profitable.

The closures do not represent a broader rethinking or restructuring of the LTL terminal network, he said.

"We selected those remote terminals because we were able to handle the freight from larger terminals within driving distance, without any impact on our customers," Jacobs said. "They handled a fraction of a percent of our total freight flows.

"The terminal network that Con-way had was well designed and is functioning very well," he said. "We’re studying all the lanes and seeing where we need to raise or lower prices a little bit. We bought the company for its terminal network.

Obviously we want to keep it."

XPO has achieved $50 million of the $170 million to $200 million in annualized savings it expects over two years in the LTL operation, Jacobs said. “Our plan is very much on track. The integration is off to a good start.”

The company has cut about 500 jobs, mainly management and back-office positions, at the former Con-way Freight.

Jacobs said a leaner, more “delineated” organization structure is taking shape at the LTL subsidiary, which has been renamed XPO Logistics.

Two former Con-way Freight executives were hired by YRC Worldwide, sparking a lawsuit from XPO. Jacobs declined to comment on the lawsuit.

http://www.joc.com/trucking-logistic..._20160208.html

Southeastern US LTL carrier expands in Canada

William B. Cassidy, Senior Editor | Feb 13, 2016 1:27PM EST



Southeastern Freight Lines is expanding its business in Canada, launching a door-to-door less-than-truckload service linking the Southeastern U.S. with Ontario and Quebec.

“We’ve changed our business model” to serve cross-border shippers directly, Bob Bullock, vice president of international for the Lexington, South Carolina-based carrier, told JOC.com. “We used to use an interline partner in Canada,” he said.

“The features of our new system include our own direct linehaul, Toronto-based customer service associates, a Southeastern tariff and an SEFL Canadian sales team to better serve our customers. We’re really in control.”

Southeastern is the 11th-largest U.S. LTL carrier, and one of the largest regional LTL carriers, with more than $1 billion in revenue in 2014, according to SJ Consulting Group. The company has been expanding its 13-state footprint, which runs from Virginia to Florida and Puerto Rico to Texas. The carrier extended service into the U.S. Midwest by opening facilities in Kentucky and Ohio last year.

The new cross-border service is provided through a daily linehaul run between a gateway service center in Charlotte, North Carolina, and a Southeastern terminal in Toronto. The U.S. carrier uses a Canadian agent to provide pickup and delivery services. “To the customer, it’s all Southeastern,” Bullock said. “We’re extending our brand and corporate culture into Canada.”

Initially, Southeastern is working with new and existing customers, moving a wide variety of consumer and industrial goods across the northern U.S. border. Bullock expects the business to expand, especially as the U.S.-Canadian currency exchange rate favors Canadians shipping goods to the U.S. “Southbound is probably going to jump because of the dollar.”

Contact William B. Cassidy at bill.cassidy@ihs.com and follow him on Twitter: @wbcassidy_joc

http://www.joc.com/trucking-logistic..._20160213.html

Dicom to Offer Canada and U.S. Cross-Border Ground Parcel Service

By: AJOT | Mar 16 2016 at 09:07 AM | Transport Intermediaries

Network to cover all of Ontario and Quebec, along with 12 states; provide two-day ground for 95 percent of service points

MONTREAL - Dicom Transportation Group, a leading provider of business-to-business expedited transportation and logistics services, announced the planned introduction of their Canada and U.S. cross-border ground parcel services. The cross-border services are currently targeted for introduction mid year 2016.

The new service will operate under the Dicom Parcel name, and serve the Canadian provinces of Ontario and Quebec, along with 12 U.S. states: Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont and Virginia.

“In 2015, we acquired Eastern Connection – one of the largest regional parcel service providers in the U.S. – and immediately integrated our expansive networks. Our combined offering will have sort centers supporting 45 terminals across 12 states, as well as Ontario and Quebec,” said Scott Dobak, CEO, Dicom Transportation Group.

“Approximately 900 drivers and our extensive line-haul network will be used in order to provide two-day ground transportation between 95 percent of the points serviced. “

The Dicom Parcel expanded network will be one of the largest in the combined areas. Other Canadian provinces will be serviced through existing Dicom strategic partners.

“The new service will create efficiencies and value for cross-border shippers in need of fast and reliable ground parcel transportation,” said Ken Nadler, Dicom chief commercial officer. “As part of the Dicom standard service, we will reach points in 2 days that other carriers view as a more expensive upgrade.”

https://www.ajot.com/news/dicom-to-o...parcel-service

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