Business is perking up for Dependable Companies. The Los Angeles-based transportation and logistics company recently acquired two trucking-related businesses in Southern California, and is shopping around for more.
Dependable purchased C.A.N. Transport, a drayage company in Carson, Calif., and Atlant USA, a Compton, Calif.-based distribution firm. The acquisitions are Dependable’s first buys since the purchase of Matheson Fast Freight in 2010.
“Do I think there is more opportunity out there? I do,” said Ron Massman, CEO of the business founded by his father, Henry Massman, with one truck in 1950.
“Our volumes have been good so far in January and February,” Massman said. “They’ve been up and moving in the right direction. We’ve picked up some new additional business besides the acquisitions” of Atlant and C.A.N. Transport.
“I’ve got good vibes,” he said, “and I haven’t felt that way in a while."
Increasingly stringent California Air Resources Board regulations are raising the cost of truck equipment, “and there are companies out there that have not been able to buy new trucks,” Massman said. Those carriers may decide to sell their business.
“There are a lot of marginal companies that have suffered a long time, and they’re ready to throw in the towel,” he said, creating opportunity for companies such as Dependable. “There are going to be (carriers) that either have to close or sell.”
Dependable has been growing by acquisition since it branched into warehousing with the purchase of Freight Transport in 1968. It now has six divisions covering trucking, air and ocean freight forwarding, warehousing, distribution and logistics, including Dependable Hawaiian Express, which handles full and less-than-containerload freight to and from Hawaii and Guam.
The company expects about $270 million in revenue in 2013, Massman said — “and it could be more than that” if Dependable acquires more businesses.
The trucking division alone, Dependable Highway Express, ranked 49 among the top 50 less-than-truckload carriers in 2011, according to SJ Consulting Group, with about $68 million in LTL revenue and 9.7 percent annualized growth.
That trucking operation grew by about 4 percent in 2012, Massman said.
Dependable’s return to acquisitions signals increased economic confidence. “We’re looking at a couple” of potential purchases, Massman said. “We slowed (acquisitions) a little bit in recent years, and I’m ready to get back in that mode.”
C.A.N. will boost Dependable’s heavy-container drayage business, he said. The drayage company hauls overweight containers from the docks to a facility where they can be transloaded. “They’re very close to the (Port of Los Angeles) harbor and within the heavyweight (container corridor) zone,” Massman said.
The contents of four overweight containers can be transloaded into five standard intermodal containers, Massman said, saving shippers as much as 20 percent on their international container shipping costs. “The savings can be significant,” he said.
C.A.N., with more than $10 million in annual sales, brings about 80 drayage drivers to Dependable, both company employees and owner-operators, Massman said.
Atlant’s business is more specific. The company’s main warehousing and distribution client, Massman said, is The Coffee Bean and Tea Leaf, a privately owned coffee and tea company with hundreds of locations in the U.S. and overseas. “We’ll deliver to all the company-owned stores in California,” he said.
“This is a very consistent scheduled (store delivery) operation, and the only one we have of this nature,” Massman said. Dependable Distribution Centers or DDC will warehouse CBTL products at its 1.5 million-square-foot Los Angeles facility, he said.