XPO Logistics to Keep Con-way Truckload Unit
XPO Logistics Inc. will keep the truckload trucking unit it acquired with the $3 billion purchase of Con-way Inc. last year after weighing whether to sell it.
As reported by the Wall Street Journal, XPO Logistics has rejected bids for the truckload shipping business it took on as part of its $3 billion acquisition of Con-way Inc., and now plans to hold onto the unit, Chief Executive Bradley Jacobs said yesterday.
Three trucking companies submitted final bids last week to purchase Con-way’s truckload operations, which had been for sale since mid-2015, Mr. Jacobs said in an interview.
“In deciding to retain this business, the company considered the value that shippers place on owned truckload capacity, particularly in U.S.-Mexico cross-border lanes, and the opportunity to improve the utilization of the assets,” XPO said in a corporate filing.
Truckload businesses typically carry goods on long-distance hauls for one individual customer per truck.
Con-way, which XPO acquired in October, mainly operates as a less-than-truckload, or LTL, carrier, combining orders from multiple customers in each truck.
“We went though the process, we compared the offers we got with what we think we could do with it…and I think we can improve it by integrating it and bringing it lots of new customers from our other service lines” Bradley Jacobs
The two business lines use different distribution networks, because LTL carriers often pick up and drop off cargo at more locations than truckload carriers.
The truckload unit is profitable and has annual earnings before interest, taxes, depreciation and amortization of $100 million, Jacobs said in January.
About 35 percent of its business comes from cross-border trucking with Mexico.
Related: XPO Logistics Closes Down Seven Former Con-Way Freight Terminals
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