The Ontime logistics carrier announced Friday. UPS CEO Carol Tomé introduced a “better, not bigger” motto to the logistics provider when she took over for former chief David Abney last June. The sale of UPS Freight is part of that strategy, in which network efficiency and profits are prioritized over size.
“What we have done in the past is built capacity or bought capacity in the hope that demand would follow, and we would take demand at any cost or any price … not necessarily nutritive demand,” Tomé told analysts on an earnings call in July.
Tomé said in a statement that selling UPS Freight “allows UPS to be even more laser-focused” on its core parcel business. The pandemic-driven spike in e-commerce boosted UPS’ B2C shipments by 33% YoY in Q3 2020, the company’s most recent earnings release. Average daily volume in B2B, on the other hand, was down nearly 8% YoY. UPS will hold its Q4 earnings call next week on Feb. 2.
TFI is working to expand its diverse trucking portfolio, though TL is its largest segment.
The assets TFI will acquire from UPS, “combined with TFI’s Canadian LTL operations, will create what we believe to be North America’s single most comprehensive LTL network, especially as we continue our expansion into Mexico leveraging our existing LTL brokerage operations there,” Bédard said in a statement.
TFI has been working to capitalize on B2C freight and transactions as business in the B2B segment slowed during the pandemic. Many of its recent acquisitions have targeted small and midsize firms. Jason Seidl, Cowen managing director for industrials, airfreight and surface transportation, predicted TFI would begin to target larger trucking firms.
Post time: Sep-03-2021