Roadrunner Strengthens LTL Network

Roadrunner Strengthens LTL Network

Roadrunner Transportation Systems has been buying truckload carriers like a Black Friday shopper, but the company isn’t neglecting its less-than-truckload side.

On Nov. 26, Roadrunner opened an outbound LTL service center in the Boston area, its fourth new terminal in the Northeast in two years and its 25th service center.

That’s a significant expansion of the $843.6 million company’s LTL delivery network, which uses owner-operators based at service centers to pick up and haul freight point-to-point rather than a hub-and-spoke terminal network.

“The company has experienced success with the outbound service centers that are currently serving the New York metro area, Philadelphia and Baltimore, and we believe this additional facility will add to our strength and allow us to continue our growth in the region,” said Scott Dobak, president of LTL at Roadrunner.

The new service center in Chicopee, Mass., has 75 drivers and services all of New England. The company already offers inbound LTL service to the region.

Earlier in November, Roadrunner acquired A&A Express and Central Cal Transportation for a total of about $28 million plus earn outs, the latest in a string of acquisitions aimed at expanding its truckload, drayage and logistics business.

In August, Roadrunner acquired a small Midwestern LTL carrier, Expedited Freight Systems, for about $10 million. The company also opened an LTL service center in Houston this summer.

Although Roadrunner’s truckload business is growing fast — increasing 90 percent last year to $301.3 million — LTL is still the Cudahy, Wis., carrier’s largest segment.

LTL freight generated 47.5 percent of Roadrunner’s $279.2 million in third-quarter revenue, while truckload freight accounted for 44.5 percent of that total.

The two segments are complimentary. By expanding truckload operations, Roadrunner reduces purchased transportation costs for LTL linehaul work.

Outbound LTL freight also gives Roadrunner’s owner-operators more opportunities to find backhauls from the Northeast after making inbound LTL deliveries.

And Roadrunner's LTL business is growing, too, though at a slower, organic pace than the acquisition-driven truckload business, increasing 13.9 percent in 2011. 

The company’s LTL revenue increased 4.9 percent from a year ago to $132.5 million in the third quarter. LTL tonnage per day rose 8.3 percent year-over-year.

Contact William B. Cassidy at wcassidy@joc.com and follow him at www.twitter.com/wbcassidy_joc.