“Carriers are looking for partners to ‘tango’ with as volume and rate expectations are very positive.”
That’s the comment of Richard Mikes, partner at Transport Capital Partners, about what the group’s most recent Business Expectations Survey says about attitudes toward buying or selling trucking companies.
Looking ahead, over half of the motor carriers said they would be interested in buying or selling a firm, according to TCP’s Second Quarter Business Expectations Survey. Larger carriers (over $25 million revenue) are twice as likely to be interested in buying as are their smaller counterparts.
In addition, while the industry appears to be improving for the next twelve months, almost one-fourth of the carriers are interested in selling within the next 18 months. Smaller carriers are more interested in selling than are larger carriers, with almost 40% of the smaller carriers wanting out compared to only 17.5% of the larger carriers.
“It is an ideal time to strategically determine what the best future strategy is and develop a plan to maximize the carrier’s value proposition,” said TCP Partner Lana Batts.
The number of carriers wishing to acquire another carrier has remained stable at 47-48% for four out of the last five quarters. TCP notes that sellers are expecting higher prices given the rise in equipment values, in increases in earnings, and higher multiples for publicly owned carriers over the last year.
Andy Ahern, CEO of Ahern and Associates, also says he likes the direction the industry is moving in. He’s already helped dozens of transportation companies close acquisition deals this year.
Most recently, Ahern’s group assisted Echo Global Logistics in acquiring Advantage Transport in addition to Atlantic Street Capital Partners in the acquisition of Patterson Motor Freight.
“Many companies through the first half of the year have engaged the services of our firm to structure an exit strategy or rebuild their business model,” explains Ahern. “We recently represented Arkansas Transit Homes who needed a buyer for their company in their sale to Bennett International Group.” Earlier this year, Ahern even represented publicly traded, Universal Truckload Services (UTSI) in the acquisition of Hart Transportation.
In addition to working with existing trucking and logistics companies who wish to expand operations, Ahern is also seeing a lot of interest from private equity firms who are now viewing transportation as a solid investment. “We’re seeing a lot of active buyers in 2011 who are either acquiring assets as part of their larger growth strategy or looking to transportation as an industry which will provide positive returns.”
Industry : Related News
7/29/2011 – Carriers Looking at Acquisitions
“Carriers are looking for partners to ‘tango’ with as volume and rate expectations are very positive.”
That’s the comment of Richard Mikes, partner at Transport Capital Partners, about what the group’s most recent Business Expectations Survey says about attitudes toward buying or selling trucking companies….
7/27/2011 – ATA Tonnage Index Jumped 2.8% in June
The American Trucking Associations’ advance seasonally adjusted For-Hire Truck Tonnage Index increased 2.8% in June after decreasing a revised 2% in May 2011….
7/27/2011 – Commercial Trailers: Production Strength Continues, Orders Fall for Third Straight Month
June saw the third consecutive monthly decline in total U.S commercial trailer net orders, with the industry posting a 26% decline from May, according to ACT Research….
7/21/2011 – Trimble to Acquire PeopleNet
Trimble Navigation is buying privately held PeopleNet, a provider of integrated onboard computing and mobile communications systems for fleets….
7/20/2011 – Truck Order Backlog Eases in June, Breaking Nine-Month Growth Streak
After increasing for nine consecutive months, the North American Class 8 order backlog dropped less than 1% during June….
7/20/2011 – McLeod Software, Tuskegee University to Analyze Lane Competition Profitability
McLeod Software and The Brimmer College of Business and Information Science at Tuskegee University are conducting a joint research project to analyze how costs and competition impact the overall pricing process for motor carriers….
7/19/2011 – Reefer Operators Say They Deserve ‘Premium Rate for Premium Services’
Operators of temperature-controlled equipment deliver premium service and should be getting premium rates from shippers, but in many cases aren’t. This is indicated in relatively low return-on-investment figures presented at the Truckload Carriers Association’s Refrigerated Division annual meeting last week in New Mexico….
7/19/2011 – FTR Shippers Condition Index Improves for Second Consecutive Month
FTR Associates’ Shippers’ Condition Index has moved upward again this month, signifying improving conditions for shippers with the current softness in the economy. However, FTR analysts say don’t expect that trend to last….
7/15/2011 – Another Record Month for TransCore’s North American Freight Index in June
For the month of June, TransCore’s North American Freight Index recorded the second-highest load volume this year and in its 15-year history….
7/14/2011 – BTS Index: Freight Shipments Fall 1.8% in May from April
Freight carried by the for-hire transportation industry fell 1.8% in May from April, falling for the second consecutive month, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics’ Freight Transportation Services Index….
7/14/2011 – Class 8 Vehicle Demand Continues to be Constrained by Industry’s Ability to Build
While some near term concerns are being generated on the international scene and the U.S. political landscape, demand for commercial vehicles continues to be solid….
7/11/2011 – As Tire Prices Rise, Association Warns of Casing Shortage
The Retread Tire Association is warning of a severe shortage of retreadable truck tires, also known as casings, as the first week of July saw another round of tire price hikes….
7/8/2011 – Most Carriers Expect Driver Pay to Increase This Year
Two thirds of carriers expect driver wage increases of 1-5% in the recent Second Quarter Business Expectations Survey by Transport Capital Partners….
7/7/2011 – FTR’s Trucking Conditions Index Stabilizes in May
FTR’s May Trucking Conditions Index remained basically flat month over month with a reading of 7.3. The Index appears to have stabilized in solidly positive territory after April’s sharp one-month drop in response to softened economic conditions….
7/7/2011 – Commercial Vehicle Orders Remain at Healthy Levels in June
A preliminary reading of commercial vehicle net orders in June for North American markets indicated continued strength in demand for medium and heavy-duty vehicles according to ACT Research….
7/6/2011 – TransCore’s First Produce Report Tracks Rising Reefer Rates
TransCore released its first in a series of free monthly Produce Season Reports, which shows rates have been rising in most areas of the country….
April 2011 Surface Trade with Canada and Mexico Rose 12.1% from April 2010
Trade using surface transportation between the United States and its North American Free Trade Agreement partners Canada and Mexico was 12.1 percent higher in April 2011 than in April 2010, reaching $73.8 billion, according to the Bureau of Transportation Statistics of the U.S. Department of Transportation….
6/30/2011 – Used Truck Sales Volumes Fall in Response to Lack of Available Inventory
Challenged by a lack of available inventory, sales volumes of used trucks fell in all sales channels during May, according to ACT Research….
6/29/2011 – Odyssey Logistics Technology Acquires Capital Transportation Solutions
Odyssey Logistics Technology Corporation acquired Capital Transportation Solutions, a non-asset-based third-party logistics provider specializing in less than truckload transportation management….
6/29/2011 – Carriers Report Increase in Rates in Second Quarter
Eighty-three percent of carriers reported average rate increases in the recent Second Quarter Business Expectations Survey by Transport Capital Partners….
6/29/2011 – Trailer Orders Fall for Second Month, but Backlogs Continue Growing
Total U.S. trailer net orders fell 9% during May, the second consecutive monthly decline for the industry, accord to ACT Research….
6/27/2011 – U.S. Cargo Theft Report: Theft Down March to May YoY
Cargo theft appeared to be down somewhat for the three-month period of March, April and May compared to last year, according to FreightWatch International, although the May numbers for two of the most highly targeted states are still pending….
6/23/2011 – Driver Turnover Rises in First Quarter
Turnover for longhaul truck drivers increased in the first three months of 2011, according to American Trucking Associations’ latest Trucking Activity Report….
6/22/2011 – Carriers’ Plans to Add Capacity Remain Unchanged for Four Quarters
The recent Second Quarter Business Expectations Survey by Transport Capital Partners found the carriers’ responses were essentially unchanged for the last four quarters on capacity plans….
6/20/2011 – Heavy Duty Order Backlog Continues to Grow
North American Class 8 net orders, while below April’s overheated intake, were still 77 percent about the same month last year, continuing to fuel growth in the industry backlog….
6/17/2011 – PTDI Revises Training Standards
The Professional Truck Driver Institute (PTDI) has revised its standards for entry-level drivers and driver training courses. Revisions include ease of use, updated terminology, more flexible standards, and inclusion of advancements in technology….
6/16/2011 – ATRI Updates Costs of Trucking Report: Drivers, Fuel Largest Expense
The American Transportation Research Institute released the findings of its 2011 update to An Analysis of the Operational Costs of Trucking….
6/15/2011 – Stage is Set for Long Run-Up in Class 8 Vehicle Demand
Despite some recent easing in freight growth and a softening in the path of the U.S. economy, demand for commercial vehicles continues to be strong….
6/15/2011 – Spot Market Freight Index Sets Record
TransCore’s North American Freight Index marked the fifth consecutive month with the highest same-month spot market freight availability in its 15-year history, up 10 percent compared to one year ago….