Tuesday, January 10, 2017

US Logistics Giant Moves into UK Road Haulage Freight Market

UPS Latest Acquisition to Tie Up with North American Operation
Shipping News Feature
UK – US – Freightex, a UK-based brokerage provider of road haulage freight services has been bought by US logistics giant UPS. The acquisition immediately establishes UPS’s presence in the growing UK and European third-party logistics (3PL) brokerage and specialist freight transportation market and creates a new global and regional platform for UPS from an established base of customers and carriers. The full terms of the deal have not been disclosed.

The transaction follows UPS’s acquisition of Coyote Logistics in August 2015. Coyote is a leading truckload brokerage provider in North America and its business model is complementary with Freightex’s. UPS states that it intends to share the best system technologies and business processes to make the two complimentary, providing customers in Europe and North America with a single system to tie in with carriers across the two regions. Alan Gershenhorn, UPS Chief Commercial Officer said:

“The U.K. and Europe are strategic 3PL freight brokerage growth markets for UPS and there is significant cross border opportunity. This acquisition provides UPS customers an immediate, knowledgeable and competitive U.K. and European presence. We intend to align Freightex with Coyote for greater efficiency and continue to invest for further growth.”

The European 3PL market was worth £143.5 billion ($174 billion/ €164.24 billion) in 2016 and, with the freight brokerage portion of the UK growing at a faster rate than the rest of the market as shippers and carriers further adopt brokerage as it strives to provide greater efficiency due to higher fleet asset utilisation when compared to operating dedicated fleets, the move presents the possibility of giving UPS a huge European market and operator base without significant asset outlays in fleet purchases and maintenance.

With UPS among the largest multi-modal transportation companies in the world, with extensive global airlines, trucking and package delivery networks, the acquisition of Freightex’s trade network means that the US company expects to further improve its own efficiencies in Europe, where it has already operated for more than 40 years.

UPS Says that by having access to the group’s global network, Freightex customers will gain the benefits of scale, reach, and access to a broad integrated portfolio of shipping solutions for all their supply chain management and shipping needs. In turn, Freightex operations will provide UPS customers a turn-key UK and European solution where the pair claim brokered freight movements provide the most competitive option. Tim Phillips, Freightex’s Chief Executive Officer commented:

“We are excited to join the UPS organization and Coyote brokerage operations, UPS and Coyote have industry-leading technology, a no-excuses customer service culture, and a proven record of success. We will improve our efficiency through Coyote’s technology and use of the UPS network, while continuing to out-service the competition and provide results that customers count on us to deliver.”

Phillips will continue to lead the Freightex business, which will operate as a wholly-owned subsidiary of UPS.