Echo Global Logistics announces acquisition of Fastmore Logistics

Earlier this week, Chicago-based third-party logistics and technology-enabled transportation services provider Echo Global Logistics announced it has made an expansion to its services portfolio, in acquiring Schaumburg, Ill.-based freight transportation broker Fastmore Logistics.

Financial terms of the acquisition were not disclosed.

Established in 2005, Fastmore’s main focus is on selling domestic non-asset-based transportation services to international freight forwarders.

Echo officials said that Fastmore’s domestic operations are similar to those of Echo’s, with the real benefit of bringing Fastmore into the fold is that it offers up what it called a unique point of entry into an expansive network of expedited brokerage for the international freight forwarding market through various types of equipment, including: cargo vans, straight trucks, and full truckload.

In explaining the rationale for this acquisition, Echo CEO Doug Waggoner told LM in an interview that with freight forwarders moving a lot of freight on trucks, whether it is air freight or ocean freight, there has always been sort of a disconnect between domestic freight people and international freight people.

“It is two different languages and two different rating systems, as well as the paperwork and customs and all of that,” he said. “I found in my experience that it is hard to cross-sell into that other mode. Fastmore is a company that really, in a sense, is a traditional truckload broker, but it comes from a freight forwarding background and know how to speak the language of freight forwarders. It is able to talk to them and offer them truckload services. Fastmore is a smaller company and did not have total coverage so we think that as part of Echo we are going to be able to penetrate the market more deeply. We are going to be able to add LTL (less-than-truckload) to the service offering. It is a nice niche and a lot of freight we were not able to call on before, and this gives us that capability.”

Waggoner added that this deal is more about penetrating a market vertical that Echo does not presently participate in, as Echo does not move a lot of freight for freight forwarders today.

“This really gets our foot in the door,” he said.

Echo President and Chief Operating Officer Dave Menzel said in an interview that Echo was very impressed and excited to be able to join up with Fastmore’s leadership team.

“Ray Sciuckas [Fastmore Founder and CEO] has a tremendous amount of experience in the freight forwarding industry, and I think the other thing that was very important in this deal for us is that there really is no overlap of business,” he said. “Fastmore is in a niche part of the market that we have not served, but yet our truckload and multimodal capabilities will add capabilities to what they do. We just felt like this was a great synergistic deal that serves a different part of the market but in a way that is consistent with the Echo culture.”

Menzel added that there is virtually no overlap between the respective customer bases for Echo and Fastmore, noting that Fastmore is selling into international freight forwarders and also calling directly on stations in different geographic markets.

“To some extent, this does not affect our shippers,” he said. “The synergy is a little bit more on the capacity side and the services we can deliver into their customer base. Because they are a smaller company, they really only penetrated roughly 40% of the market that they serve. So, with our kind of sales expertise and the financial resources behind Echo, we are going to help them ramp up and penetrate the entire market and be able to sell more into that specific customer base.”

As for what the next steps are, in terms of integrating Fastmore into Echo, Menzel said Echo will augment Fastmore’s technology capability, with Fastmore running independently, to some extent, on its own system, as it is sort of an entirely different segment of the market.

What’s more, he said Fastmore will eventually transition to the Echo name over time, adding that Fastmore has 52 employees and one office in Schaumburg, Ill.

“The integration is going to be more about process and sharing capabilities, rather than any significant transition on to new systems,” he said. “We expect the process to be very smooth and fluid and to just keep going.”

Fastmore’s Sciuckas said in a statement that Echo’s knowledge and passion for the digital transformation of the supply chain industry itself are great to align with.

“We’re excited to join the Echo family who will continue to invest in our core business while expanding our capabilities and service offerings to freight forwarding clients,” he said.