Skip to content
Search AI Powered

Latest Stories

Knight-Swift jumps into hot LTL market with $1.35 billion takeover

Truckload giant buys up regional carrier AAA Cooper and its 3,000 tractors and 7,000 trailers.

AAACooper-Screen-Shot-2021-07-06-at-4.34.02-PM.png

Truckload carrier Knight-Swift Transportation Holdings Inc. today entered the less than truckload (LTL) space with a splash, becoming an “even more formidable” transportation and logistics provider through a $1.35 billion acquisition of LTL carrier AAA Cooper, the company said.

The company bought a 100% stake of Dothan, Alabama-based AAA Cooper Transportation and its affiliated entity AAA Cooper, a top-15-ranked LTL carrier that also offers dedicated contract carriage and ancillary services.


For the price tag, Phoenix-based Knight-Swift gains access to the extensive AAA Cooper network of approximately 70 facilities (90% owned, with the remainder leased), consisting of a terminal door count of over 3,400, located across the southeastern and midwestern U.S. The firm provides nationwide service through affiliations with other regional and national LTL companies. AAA Cooper’s fleet includes nearly 3,000 tractors and 7,000 trailers, operated by a workforce of some 4,800 people.

While that portfolio is large, it is a fraction the size of Knight-Swift, which had already operated the country's largest full truckload fleet, including 19,000 tractors, 58,000 trailers, and 24,000 employees. The company built that huge fleet through its own history of acquisition, dating back to 2017 when truckload carrier Knight Transportation Inc. completed a $6 billion merger with rival truckload carrier Swift Transportation LLC.

The purchase gives it an instant presence in the LTL sector, which has been under strain to provide enough freight capacity for the nation’s economic recovery from the pandemic recession. And the company said it plans to stay on the lookout for additional takeovers.

"In seeking our first LTL partner, we had three main requirements – the scale for entry with significant market share, the profitability and management depth to operate independently and provide a platform for compelling growth opportunities, and a world class culture,” Knight-Swift CEO Dave Jackson said in a release. “We were excited to have identified AAA Cooper as a partner that meets all three requirements, and I couldn’t be happier to finally find the right time for both of us to create a partnership. This transaction firmly positions us as a meaningful player in the LTL space, where we intend to grow both organically and through future acquisitions,” Jackson said.

The purchase could also be quite profitable. According to Knight-Swift, AAA Cooper is expected to generate approximately $780 million in revenue and $140 million in EBITDA (net income before interest, income taxes, depreciation, and amortization) for full-year 2021.

Investors say fleets are attracted to the LTL sector because it features consistent price increases, a consolidated nature—the top 20 LTL providers control about 87% of the U.S. market—and growth tailwinds generated by hot e-commerce demand and shifting supply chains, according to a release from Garrett Holland, a Baird senior research analyst.

Holland praised Knight-Swift (known as KNX for its stock symbol) for its move. “Through this opportunistic deal, KNX enters the LTL market, leverages its leading scale, and creates an even more formidable transportation/logistics provider. The addition of the LTL offering should help reduce KNX’s cyclicality overall, and management should be able to apply operational expertise to improve profitability/growth,” Holland said in the release.

In fact, other trucking carriers have also been positioning themselves to fit the changing market in recent months, such as Werner Enterprises Inc. buying the regional truckload carrier ECM Transport Group last week for $142.4 million and XPO Logistics spinning off its contract warehousing arm to focus on freight brokerage and LTL.

As an immediate impact of Knight-Swift’s move, AAA Cooper will continue to operate independently, while its CEO, Reid Dove, will continue in his position and also join the Knight-Swift board of directors. But on a longer-term basis, the company said it had “identified multiple areas of revenue and cost synergies that are expected to lead to growth and margin expansion consistent with Knight-Swift’s return on investment targets, while preserving AAA Cooper’s brand, locations, people, and culture.”


The Latest

More Stories

freight at a sea port

DOT delivers $580 million to boost port infrastructure

Leaders at American ports are cheering the latest round of federal infrastructure funding announced today, which will bring almost $580 million in Port Infrastructure Development Program (PIDP) awards, funding 31 projects in 15 states and one territory.

The money was funded by the Bipartisan Infrastructure Law and awarded by the U.S. Department of Transportation (USDOT)’s Maritime Administration (MARAD).

Keep ReadingShow less

Featured

Mobile robots, drones move beyond the hype

Mobile robots, drones move beyond the hype

Supply chains are poised for accelerated adoption of mobile robots and drones as those technologies mature and companies focus on implementing artificial intelligence (AI) and automation across their logistics operations.

That’s according to data from Gartner’s Hype Cycle for Mobile Robots and Drones, released this week. The report shows that several mobile robotics technologies will mature over the next two to five years, and also identifies breakthrough and rising technologies set to have an impact further out.

Keep ReadingShow less
warehouse automation systems

Cimcorp's new CEO sees growth in grocery and tire segments

Logistics automation systems integrator Cimcorp today named company insider Veli-Matti Hakala as its new CEO, saying he will cultivate growth in both the company and its clientele, specifically in the grocery retail and tire plant logistics sectors.

An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.

Keep ReadingShow less

Securing the last mile

Although many shoppers will return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.

One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.

Keep ReadingShow less
image of board and prevedere software

Board acquires Prevedere to build business prediction platform

The Boston-based enterprise software vendor Board has acquired the California company Prevedere, a provider of predictive planning technology, saying the move will integrate internal performance metrics with external economic intelligence.

According to Board, the combined technologies will integrate millions of external data points—ranging from macroeconomic indicators to AI-driven predictive models—to help companies build predictive models for critical planning needs, cutting costs by reducing inventory excess and optimizing logistics in response to global trade dynamics.

Keep ReadingShow less