XPO Logistics Acquires Con-Way
GREENWICH, Conn. - October 30, 2015 - XPO Logistics, Inc. (NYSE: XPO) ("XPO") today announced that it has consummated the previously announced agreement to acquire Con-way Inc.
The transaction makes XPO the second largest less-than-truckload (LTL) provider in North America; expands the company's global contract logistics, managed transportation and freight brokerage businesses; and adds truckload transportation in North America. All of the acquired operations - Con-way Freight, Menlo Logistics, Con-way Truckload and Con-way Multimodal - are now operating under the single global brand of XPO Logistics.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, "We have an unprecedented opportunity to create value for our customers and investors as a result of the Con-way transaction. We're moving quickly to eliminate redundancies and leverage our scale to better serve our more than 50,000 customers."
Jacobs continued, "We'll issue new financial targets with our third quarter earnings release on November 4."
Third Quarter 2015 Conference Call
The company will hold its third quarter conference call and webcast on Thursday, November 5, 2015, at 8:30 a.m. Eastern Time. For toll-free access by phone from the United States and Canada: 1-800-708-4539. International callers dial: +1-847-619-6396. The call will be webcast live online and archived at www.xpo.com/investors.
Tender Offer and Financing
The tender offer for all of the outstanding shares of Con-way common stock expired immediately after 12:01 a.m., New York City time, on October 30, 2015. Computershare Trust Company, N.A., the depositary for the tender offer, has advised XPO that a total of 46,150,072 shares of Con-way common stock, excluding Con-way shares tendered by notice of guaranteed delivery for which certificates were not yet delivered, representing approximately 81.1% of Con-way's outstanding shares, were validly tendered into and not withdrawn from the tender offer. XPO and its subsidiary, Canada Merger Corp. have accepted for payment and will promptly pay for all shares that were validly tendered and not withdrawn.
Following its acceptance of the tendered shares, XPO completed its acquisition of Con-way through the merger of Canada Merger Corp. with and into Con-way without a vote of Con-way's stockholders pursuant to Section 251(h) of the Delaware General Corporation Law. As a result of the completed merger, Con-way became a wholly owned subsidiary of XPO. In connection with the merger, all Con-way shares not validly tendered into the tender offer have been cancelled and converted into the right to receive the same $47.60 per share, net to the seller in cash, without interest thereon and less any applicable withholding taxes, as is to be paid for all shares that were validly tendered and not withdrawn in the tender offer. Con-way shares have ceased trading on the New York Stock Exchange.
In connection with the completion of the acquisition, XPO entered into a new $1.6 billion term loan credit agreement, the proceeds of which were used, together with cash on hand, to finance a portion of the acquisition consideration as well as other costs and expenses related to the transaction. XPO also entered into a new $1.0 billion asset-based revolving credit facility, which replaced XPO's existing $415 million asset-based revolving credit facility.
J.P. Morgan and Morgan Stanley served as financial advisors to XPO Logistics, and Wachtell, Lipton, Rosen & Katz acted as legal advisor. Citigroup served as financial advisor to Con-way, and Sidley Austin LLP acted as legal advisor.
About XPO Logistics, Inc.
XPO Logistics, Inc. (NYSE: XPO) is a top ten global provider of cutting-edge supply chain solutions to the most successful companies in the world. The company provides services for less-than-truckload transportation, truckload brokerage and transportation, last mile logistics, engineered supply chain solutions, high-value-add warehousing and distribution, ground and air expedite, intermodal, drayage, global forwarding and managed transportation. XPO serves more than 50,000 customers with a highly integrated network of over 84,000 employees and 1,469 locations in 32 countries. www.xpo.com
XPO's corporate headquarters is in Greenwich, Conn., USA, and its European headquarters is in Lyon, France. The company holds an 86.25% controlling interest in Norbert Dentressangle SA. The remaining ND stock is traded as GND on Euronext Paris / Euronext London - Isin FR0000052870. www.norbert-dentressangle.com
What's Causing the Truck Driver Shortage?
Look up news stories on the trucking industry, and you’re likely to find a lot of coverage of the nationwide driver shortage.
According to the American Trucking Association, the industry had a shortage of 38,000 drivers in 2014, a number that was expected to jump to nearly 48,000 by the end of 2015. The average age of the American truck driver is 49, which means the industry expects to see a significant number of retirements in the next 10 years.
Combine that with a growing demand for consumer goods and a struggle to find qualified candidates and you have an industry that needs more drivers than it has. Over the next decade, the ATA estimates trucking companies will need to hire an average of 89,000 drivers a year.
Tomorrow’s Truckers Could Be Much Younger
In order to combat the problem of drivers getting older, the industry is looking at hiring drivers who are younger.
The ATA lobbied Congress earlier this year in support of legislation that would start a pilot program allowing drivers as young as 18 to take trucks and buses across state lines. In many states, the minimum driving age for truckers is 21.
And in some cases, that rule makes no sense, ATA Vice President for Public Safety Rob Abbott told the Wall Street Journal in October.
“Drivers today can drive from San Francisco to San Diego, but can’t cross the street in Texarkana,” a city on the Texas-Arkansas border, Abbott said. “That’s an imaginary boundary. That’s illogical.”
The Journal also spoke to a veteran, third-generation trucker who said his sons have chosen not to continue the family tradition. The three-year gap between the time they become adults and the time they can drive trucks across state-lines was too long to wait, so they looked for employment elsewhere.
Opponents of the legislation have raised safety concerns, but ATA spokesman Sean McNally told Politico that the change won’t mean “teenagers crossing the country willy-nilly.”
He argued that the program will help new drivers be safer. “There’s no upside to our industry to do things that are unsafe,” said McNally.
Fewer Drivers, Higher Pay
The driver shortage is also driving up salaries for truckers. The average pay for long-haul truckers rose to $57,000 this year, a 17 percent increase since the end of 2013. As Fortune noted, truckers are also getting $5,000 signing bonuses and “amenities such as satellite televisions to make life a bit more comfortable when they’re on the road.”
“As the unemployment rate declines and other options are created, this career path looks less and less desirable,” Fortune’s Michael Addady wrote. “Trucking fleets are left fighting for the same workers, forcing them to hike paychecks and sweeten the deal with some perks.”
The ATA is also proposing some other solutions to deal with the shortage of drivers:
NEMF Opens Joliet, IL Terminal
New England Motor Freight (NEMF), one of the leading providers of multi-regional less-than-truckload (LTL) transportation services, today announced the opening of a new service center in Joliet, IL effective October 12, 2015. The 4.5 acre terminal is located at 23448 West Eames St., Channahon, Illinois. The 35-door facility will be run by Terminal Manager Miguel Llano.
“NEMF has had a strong customer following in the Chicago market since 2006 when we opened our first Illinois service center in Elk Grove Village. Our business continues to grow and in our goal to provide our customers with a consistent and reliable service product we are opening a second Chicago area terminal in Joliet. The facility is located on the southwest side of the city and places us closer to our customer base allowing us to provide expanded capacity and additional direct service points. We are excited to officially begin operations in this new service center in October”, said NEMF’s President, Thomas Connery.
Southeastern Freight Lines Receives Quest for Quality Award 32 Years in a Row
LEXINGTON, S.C. Southeastern Freight Lines, a leading provider of regional less-than-truckload (LTL) transportation services, has been honored with Logistics Management’s 2015 Quest for Quality Award in the South/South Central Regional LTL category. This is the 32nd year in a row Southeastern has received this award.
The Quest for Quality Awards are the gold standard for customer satisfaction and performance excellence for carriers, ports and logistics providers worldwide.
"We are honored to once again be recognized with this award by Logistics Management and its readers, the industry’s most influential shippers," said Mike Heaton, senior vice president of sales and marketing, Southeastern Freight Lines. "Each year, Logistics Management surveys its readers to evaluate transportation service providers and having been recognized for 32 consecutive years speaks volumes to Southeastern’s commitment to providing quality customer service.”
Logistics Management’s Quest for Quality survey is the most respected third party survey of its kind in the transportation and logistics industry. Transportation service providers are evaluated on performance, value, information technology, customer service and equipment and operations. The driving force behind Southeastern’s success is its commitment to adding value throughout all aspects of serving customers and providing “quality without question.” Southeastern’s emphasis on reliable service has resulted in more than 400 quality awards from some of the most respected companies in the United States. These awards reflect Southeastern’s trustworthiness and dedication to customer satisfaction.
Highway Bill Passes Through the House
On November 5th, a highway bill finally has passed the house by a vote of 363-64. The bill authorizes around $340 billion over a six year timeframe. This will set up the need for a meeting the Senate so that a compromised highway bill can be discussed between the transportation leaders from both chambers. There is still a need to agree to a final bill acceptable to both chambers prior to the expiration of the current Highway Trust fund on November 20th. Now that the house has passed this bill they must find a way to discuss the differences with the senate and incorporate some of those differences into the final bill.
This has been a long time coming. In fact, no House leader has been able to pass a “massive, multiyear highway and transit bill” in the past decade. While this does not provide a long-term solution, it will provide relief to the crumbling infrastructure of the highways, bridges and roads.
While the bill is lacking some needed coverage, it is a step in the right direction and there seems to be some forward movement on this front. We will be looking to see if both chambers of Congress can come together just enough to send a bill to the President prior to the 20th.
Since the Senate has passed their version of the bill earlier in the year, a committee now needs to be appointed to discuss each version and come to an agreement on a final bill. This committee has not yet been determined and may take until after the holidays to complete.
Excerpted from Caygle, Heather & Gardner, Lauren. “Ryan notches a transportation win.” Politco.com 5 Nov. 2015. Web, and Mulero, Eugene. “House Passes Highway Bill, Sets Up Conference With Senate.” TransportTopics.com 5 Nov. 2015. Web.
New UPS Driver Training Center in Atlanta
UPS has announced that they will be opening a new driver training facility in the Atlanta area in December 2015. This facility is complete with a training course that is built to replicate a small town to provide potential drivers the opportunity of more realistic hands on training. This will be the seventh training site created by UPS with the sole purpose of improving overall safety and service for their clients.
Transportation Topics. “UPS to Open Driver-Training Center in Atlanta” TransportTopics.com 19 Nov. 2015. Web.
Help Your Transportation Provider Secure Your Cargo From Theft With Vital Transportation Solutions
Fraud and theft in the trucking industry are estimated to cost the industry over $1 billion dollars per year. On average, there are three loads stolen per day somewhere in America (source: truckstop.com). Although, in most cases your transportation provider should have the insurances in place to cover the costs of such an event, this will not compensate the lost production time and delay to your customer.
At Vital Transportation Solutions, we want to assure that this does not happen to your shipments. There are a few simple basic steps that we can make together to ensure you are protected, including strong carrier vetting, use of pick-up numbers as well as carrier verification at time of pick up.
Throughout the industry, transportation providers like Vital Transportation will be speaking to hundreds or even thousands of carriers per day to find partner carriers for your loads. The vast majority of these conversations are necessary to gather market feedback and to assure the carrier is the proper fit for your load. During these conversations potential scammers can use the information they have gathered to attempt to make pick-ups on shipments they are not currently assigned to or try to get assigned to shipments under false carrier information. Usually this is done using stolen credentials for actual legitimate carriers with established MC Numbers.
The first step in protection is a strong carrier vetting process. If your transportation provider does not vet carriers properly, you can be exposing yourself to stolen shipments, and without the proper insurance that could lead to complete loss.
At Vital Transportation Solutions we strictly vet every carrier in our system. The industry standard has been to obtain the carrier name, MC number, W-9, operating authority, and insurance certificate. However, Vital also has a strict system in place to take nothing at face value and to verify all of the information that we are given. Located on the Federal Motor Carrier Safety Administration web page (www.fmcsa.dot.gov) is all of the carriers’ uploaded information. This information can only be uploaded to the federal website by the carrier and comes with a pin number known only to the carrier themselves. Vital diligently verifies all of the carriers’ information given at the time of booking against this master profile information to ensure you are in fact working with the actual carrier you think you are. Safer System website (www.safersys.org) is also a government website we use to check a carrier’s safety scores. This website can also be used to complete the verification process. In addition to the carrier contact verification process, we also speak directly to every carrier’s insurance agent to verify their policy is current, up to date, and carries the proper coverages that meet our minimum requirements.
Verifying the information is the absolute most important step in this process and it is a step often missed by some transportation providers. Make sure your provider has a strong system in place to reduce theft and fraud. If they don’t have your best interest in mind, you may want to consider giving Vital a chance to win your business.
Two additional steps that also help ensure your load is transported with the correct carrier involve pick-up number and DOT number verification. Unique pick-up numbers not only help eliminate loading fraudulent carriers, but also protect shippers against errors at loading. Changing these pick-up numbers every time you change carriers will ensure the right driver gets the right shipment.
Having your provider e-mail the shipping warehouse with the DOT number of the carrier assigned can also be a critical protection. At the point of loading, the shipper can check the DOT number against what is posted on the door of the truck loading. Just having your provider advertise to their carriers you use this method can ward off would be scammers looking for an easy target.
Vital Transportation is a 3rd party logistics company who takes great pride in our service. We realize there are many options available, however, we do not believe you will find one with our track record for service combined with our dedication to using safe and reliable carriers. This ensures that your product is delivered both securely and on time at a competitive price.
We work hand in hand with Simplified Logistics LLC and can be reached at any time at firstname.lastname@example.org.
Carrier Service Metrics
Carrier Profile - "New England Motor Freight"