Roadrunner Transportation Systems Announces Roadrunner Freight.
On Nov. 4, 2016, Roadrunner Transportation Systems, Inc. announced the official name change of Roadrunner LTL to Roadrunner Freight “While our rebranding is represented through our new name, it's really our tagline that says it all: Less than Truckload, More than Expected,” said Grant Crawford, President of Roadrunner Freight. “The goal of the rebranding is to better position the business as the ideal cost-effective option in the industry. Our dedication and investment in Roadrunner Freight is meant as a sign to our customers that we're devoted to their business in the less-than-truckload arena. We have a rich history, dating back to the beginning of the company in the 80s, and we're looking to redefine our objectives and business strategies to exceed the expectations of our customers.”
The Roadrunner Freight business model allows for expansion without traditional inefficiencies and costs, giving the company the ability to pass those costing efficiencies on to its customers. The company has benchmarked what is considered the industry standard and as a result will provide customers with increased visibility into delivery dates, better management capabilities for supply chain operations and more economical transportation costs.
“Roadrunner Freight will carry forward our quality less-than-truckload long haul offering, however we have re-engineered it to remain economical while being highly reliable. We are excited to bring this increased value proposition to our current and new customers,” Crawford concluded.
$558 Million Strategic Sale of Assets Will Reduce Debt, Increase Return on Capital and Improve Long-Term Growth Profile
GREENWICH, Conn. - October 27, 2016 - XPO Logistics, Inc. (NYSE: XPO) (“XPO”) today announced that it has completed the sale of its truckload business to TransForce Inc. (TSX: TFI) for approximately $558 million in cash, subject to customary adjustments. XPO will use the proceeds from the transaction to pay down debt.
The divested truckload operation encompasses approximately 3,000 tractors, 7,500 trailers and 29 locations that were part of the October 2015 acquisition of Con-way Inc. XPO will continue to offer full truckload services to customers in the United States, Mexico and Canada through its extensive brokerage network. XPO is the second largest freight brokerage provider in the world.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “TransForce is getting the 19th largest asset-based truckload carrier in the U.S., a highly experienced workforce, and a presence in the cross-border Mexico freight corridor. We divested these assets to concentrate on growing our value to customers in the areas where we're leaders in the industry: contract logistics, truck brokerage, less-than-truckload, last mile, intermodal, drayage, expedite and managed transportation.”
Jacobs continued: “This transaction strengthens our balance sheet and improves our long-term growth profile. In addition to deleveraging, the sale reduces our annual capex requirements, increases our return on capital, and lessens the cyclicality of our operations.”
The divested operations, which have been reported as part of XPO's Transportation segment, were expected to generate approximately $10 million of operating income for the remaining two months of 2016, and depreciation and amortization of approximately $10 million. The company will update its financial targets to reflect the transaction when it reports its third quarter results on November 2, 2016.
Saia LTL Freight Announces Northeast Expansion
In very exciting news, it was announced this morning that Saia LTL Freight will soon be expanding its operations to the Northeast United States.
It is our expectation to open three to five terminals in New Jersey and Pennsylvania during Q2, 2017.
We'll be opening facilities to serve the following cities and their surrounding markets:
• Newark, NJ
• Harrisburg, PA
• Philadelphia, PA
• Pittsburgh, PA
For more than 90 years, Saia has focused on growth. We estimate the Northeast LTL market represents approximately $7 Billion in annual market revenue opportunity. At just 3% market share, this would mean over $200 million in additional revenue for Saia.
Beyond this first phase, we expect to continue to add new markets in the Northeast in 2018 and 2019 towards our goal of complete coverage of the continental United States. We will also remain open to any potential acquisition opportunities that might enable us to speed up the process
Our expansion efforts in the Northeast will be supported and enhanced by the many quality initiatives we've instituted over the last several years and is a result of listening to the needs of our customers.
Not only are we investing in new terminals and equipment, but we are investing heavily in certain areas of our existing network so that we will be able to handle the increased freight flows to and from the new markets at the high levels of service quality that our customers expect from Saia. We plan to invest nearly $200 Million in capital expenditures in 2017.
We have begun making pricing adjustments and will have more detail regarding this as time progresses.
We expect to have our sales and operations leadership teams in place by mid-November.
Carrier Service Metrics
Fuel Flash - November 2016 by Sokolis Group
The increase in September was primarily driven by news that OPEC members, along with other foreign oil producing countries, were increasingly likely to place limits on oil production. As October progressed, oil prices remained steady in a higher price range. Continuing headlines from oil producing countries reflect optimism that an agreement would be reached at their next meeting in late November to reduce or cap production. Prices were also supported by reductions in oil inventories which indicated supply and demand might find a balance sooner than anticipated.
Near the end of October, cracks began to emerge in the perceived solidarity of the oil producing countries to reach an agreement. Some of them began to express their desire for an exemption from any agreement to freeze production due to hardships they were recovering from such as Iraq's wars and Iran's economic sanctions. This dissent reinforced doubts about the group's ability to reach an agreement to tighten supply which led oil prices lower.
Despite the decline in oil prices toward the end of October. the average price for the entire month increased compared to September. Wholesale diesel fuel prices moved up similarly when retail prices lagged behind. The graph below shows the movement of crude oil (converted to gallons) along with wholesale (“rack”) and retail diesel fuel prices over the trailing 15 months:
As a result of the market changes in October, most fleets would have seen a modest increase in their overall fuel cost compared to September. Heading into November, Sokolis Group anticipates prices may continue to drift downwards as a result of the conflicting messages from oil producing countries leading up to their next meeting at the end of the month. However, it would not be surprising to see prices rapidly turn upward if the headlines begin to reflect broader support of an agreement.
It is difficult to say where prices will be heading beyond November pending the outcome of the meeting. If an agreement is reached, prices would likely settle back toward the high 50's, possibly even low 60's. If no agreement is reached, prices would likely settle back toward the low 40's until sometime in 2017 when global supply and demand is anticipated to regain some balance.
If you're concerned about the impact of future fuel price changes for your fleet and want to know if you're receiving the best fuel prices possible, contact Conor Proud at firstname.lastname@example.org or 267-482-6159. We are the nation's leading independent fuel management consulting team and can help you make sure that your fuel management program is running at peak efficiency.
Carrier Profile - “Dayton Freight”
Georgia Logistics October 2016 Market Snapshot
Click here to view the pdf version of the Market Snapshot.