The nascent economic recovery is beginning to fuel consolidation in trucking, as healthier carriers expand their networks by buying up smaller competitors and niche players.
The Dependable Companies this month acquired Matheson Fast Freight, a less-than-truckload carrier providing direct service in California and Nevada, and merged it with Dependable Highway Express, its regional LTL and truckload division.
|It’s another step in an expansion plan at Dependable that hasn’t appeared to slow down for the recession or geography. The Dependable Companies bought three businesses last year, including J&M Trucking, a drayage carrier in Gardena, Calif.; Logistics 2000, a warehousing and logistics firm; and C&H Express, a freight forwarder that gives the company a foothold in Latin America.|
Earlier this month, Cleveland-based Dedicated Transport expanded into liquid bulk trucking by acquiring All Star Transportation, the first of several upcoming acquisitions, President and CEO Frank Wagner said.
Universal Truckload Services of Warren, Mich., acquired three companies in December, and Milwaukee-based Roadrunner Transportation Services bought regional LTL carrier Bullet Freight Systems of Anaheim, Calif.
“We’ve been very aggressive about acquiring new business,” said Mark DiBlasi, Roadrunner president and CEO. “We’ve been able to weather the recession and been profitable . . . We’re in a growth mode.”
Others growing tired of sliding revenue and thin profit margins, along with rising operating costs and tougher regulation, are leaving the trucking business, putting up “for sale” signs. More companies are expected to go on the block during the recovery, when owners might expect to get more for their businesses, than during the recession last year, when more companies simply shut down.
Even those that don’t see an increase in their company’s value might not see a better opportunity to sell any time soon, as trucking operating costs rise.
“People who thought they could hold out are realizing they are less able to do so, and more inclined to think about selling,” Massman said. “License and insurance renewals are coming up as well, and that’s going to be another motivating factor, pressuring cash reserves at companies still wobbling on their wheels.
At The Dependable Companies, “we’re still looking for opportunities for acquisitions and internal growth,” Massman said.
That includes not just at DHE but at its six divisions, which include Dependable Logistics Services, Dependable Hawaiian Express, Dependable Distribution Centers, Dependable AirCargo Express and ocean freight forwarder Dependable Global Express.
“We’ve seen an upturn in all our divisions” since the start of the year, Massman said. “It seemed to me in January we started seeing more activity and new business, though I don’t want to get overly optimistic.”
The business has grown, largely through acquisition, from a one-truck business founded by Massman’s father in 1950.
“Back in 1968, when we were just a little local trucking company here in Southern California, we purchased a warehousing company,” he said. Successive acquisitions in the forwarding arena launched its international business.
“Last year, we opened an office in Oman, Jordan. Now we’re moving into Central and South America. That’s an up-and-coming market so we thought we should get a foothold in it.”
The Matheson buy will generate more business with shippers closer to home as Matheson’s customers tap into The Dependable Companies’ regional, national and global services, Massman said.
“They’re a very solid company, with strong customer loyalty,” he said.
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