Logistics companies add more than potential revenue when acquiring smaller firms — they’re adding wings and floors onto their businesses.
Chicago-based Echo Global acquired Sharp Freight System, a $71 million intermodal and truck freight brokerage in Yorba Linda, Calif., with an office in Houston.
XPO purchased Turbo Logistics, a $125 million truck freight brokerage previously owned by OHL with offices in Chicago, Dallas, Gainesville, Fla., and Reno, Nev.
Both buyouts allow the acquirer to expand certain lines of business — intermodal and drayage in the case of Echo and refrigerated and expedited for XPO.
“Temperature-control is something we do a little of and want to do a lot more,” said Bradley S. Jacobs, XPO chairman and CEO. “It’s one of our fastest growing niches.”
Approximately 31 percent of Turbo’s business is in refrigerated trucking and another 17 percent is expedited freight, the focus of XPO’s Express-1 subsidiary.
“We think one plus one should equal more than two when it comes to expedited,” Jacobs said.
Turbo also brings new territory and capacity to XPO. “Their biggest location is Gainesville, and our plan is to add people there and in Reno,” Jacobs said.
“We’ve hired 125 sales people in the past 90 days, and we’re not stopping,” he said. XPO will merge its existing offices in Dallas and Chicago with Turbo’s offices.
Smart Freight gives Echo a bigger foothold in Texas, where it has offices in Dallas, and increases its access to freight moving through the Port of Houston.
The addition of Houston to Echo’s national network “improves our ability to serve clients moving freight into and out of Mexico,” the company said in a statement.
The Sharp buyout complements the East Coast acquisition of Trailer Transport Systems last December, Echo said, expanding the broker’s intermodal reach.
“Sharp has strong relationships with both drayage and rail carriers which enable a competitive service offering out of West Coast markets,” Echo Global said.
The acquisition also brings new multimodal freight management technology to Echo, as well as new talent and customers using several transportation modes.
“This acquisition better positions us to offer our clients the simplicity of a complete transportation management solution,” said Douglas R. Waggoner, CEO.
Simplicity and scale — two key elements for shippers as logistics companies branch out and build up their businesses in a more multimodal world.