Schneider files IPO registration statement

Following its October announcement in which it announced plans to pursue an initial public offering (IPO) of common stock in 2017, subject to satisfactory market conditions, Green Bay, Wisconsin-based Schneider National, a provider of truckload, intermodal and logistics services, said in late December that it has taken another step in that process.

That step is the filing of a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (“SEC”) relating to a proposed initial public offering of shares of the Company’s Class B common stock. Schneider said it is applying to list its Class B common stock on the New York Stock Exchange under the ticker symbol “SNDR.” The number of shares to be offered and the price range for the offering have not yet been determined.

A company PR representative said there would be no other comment beyond this release.  

According to a company statement issued in October, Schneider said “the objectives of the planned transaction are to facilitate continuity of controlling ownership of Schneider by the future generations of the Schneider family, while continuing forward with its long-standing, independent, and professional, corporate governance structure.”  

And it added that this transaction will allow the company to continue its commitment to Wisconsin and the community, and to maintain and further investments in its long-term positioning.

“The Schneider family and the board of directors believe the planned transaction is in the best interests of Schneider, its associates, customers, and shareholders,” the company said.

Schneider, a $4 billion company with more than 11,000 tractors and 20,000 trailers, was established in 1935, was ranked number 2 on the Logistics Management Top 25 truckload carriers list, which is based on 2015 revenues and compiled by SJ Consulting. It has a wide-ranging portfolio of freight transportation and logistics services, including: regional and long-haul truckload, expedited, dedicated, bulk, intermodal, final mile, LTL, brokerage, cross-dock logistics, border cross, supply chain management and port logistics throughout North America.

In 2016, Schneider acquired Watkins & Shepard, a Missoula, Montana-based provider of LTL, truckload and logistics services for difficult-to-handle goods, and Lodeso, a Zeeland, Michigan-based final-mile logistics solution provider, focusing on the delivery of overweight, oversized, and difficult-to-handle goods, to augment its final mile service offerings, an area which has received a high level of attention by providers of all sizes, due to the ongoing increasing emergence and importance of e-commerce activity.

In an interview with LM at the time of these acquisitions, Mark Rourke, Schneider executive vice president, chief operating officer, explained that with retail being a major part of Schneider’s business based on its prevalence and place within the economy, with the bulk of its retail customers focused on how to grow their e-commerce channels in able to effectively compete with the large e-commerce retailers.

“The pain points they were dealing with were not for things going through the parcel networks, which is pretty efficient and fast with great service and reliability,” he said. “It was more to do with over-dimensional things that did not fit through that network or work well or perhaps were not palletized as cleanly to be able to go through an LTL network as efficiently. It is not just stuff like apparel or consumer goods people are buying, as much as it was stuff like furniture, home goods, and exercise equipment. These things are coming through that channel, and people have gotten so comfortable with the shopping experience through the online part of the retailer that was set up very well and efficiently. But they did not have a good connection to the back end, which was a supply chain move in terms of visibility and how the experience is for the customer. That was a screaming need in the market to us, especially with a national scale, which is why we are focused on serving that need.”

The news of Schneider’s IPO plans comes at a time when freight transportation and logistics IPO activity has been tempered to a large degree, as many companies that perhaps considered doing an IPO have alternatively turned to venture capital funding or been acquired by larger public companies in some cases.

Tommy Barnes, president of Chicago-based project 44, a Chicago-based technology services provider offering standardized, secure Web service API (application programming interfaces) integrations enabling 3PLs and shippers to connect with carriers in real time, told LM that this news was not viewed as entirely unexpected.  

“Schneider’s IPO will further position the company, which is already the largest privately held US trucking company by revenue, as a global supply chain powerhouse,” said Barnes. “This announcement is not a surprise — Schneider has a talented management team that produces strong results despite the weakened trucking market.”  

Barnes’ description of the trucking market is appropriate, given the still-high inventory levels that have crimped over all tonnage levels throughout 2016, coupled with a volatile market in that typical seasonal patterns are not evident.

That was made clear by American Trucking Associations Chief Economist Bob Costello saying last fall that the truck freight environment was softer than normal and is expected to remain choppy until the inventory correction is complete.  

The uneven tonnage volumes are also driven, in part, to fluctuating retail sales and jobs numbers, too, while recent consumer confidence numbers portend optimism for future economic growth to varying degrees.

In the LM Trucking Top 50, which was published in 2016, Schneider’s Rourke said that the current economy “has a 2013 feel” to it. “It’s not robust, but it’s not terrible by any stretch…it’s kind of average,” he added.