Knight-Swift Buys Dependable Highway Express’ LTL Business
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Knight-Swift Transportation Holdings on July 30 announced that it is acquiring the less-than-truckload operations of Dependable Highway Express, bolstering Knight-Swift’s LTL operations on the West Coast as part of its longer-term expansion strategy.
“This transaction increases our ability to serve customers in California, Arizona and Nevada — key markets that are often difficult to enter,” Knight-Swift CEO Adam Miller said. “It’s a strategic step in our goal of building a nationwide LTL network.”
Knight-Swift ranks No. 7 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. Dependable Highway Express ranks No. 79. Knight-Swift is the top-ranked carrier on the truckload sector list, while DHE ranks No. 28 among LTL carriers.
The new assets will become part of Knight-Swift’s AAA Cooper division. Joe Finney, formerly DHE’s chief operating officer, will lead the unit as president.
Miller
Knight-Swift acquired AAA Cooper in 2021, a year that also saw the carrier add Midwest Motor Express.
According to Bank of America analyst Ken Hoexter, the Dependable deal adds 14 terminals and 465 doors to Knight-Swift’s LTL network, with 11 of the facilities in California.
Knight-Swift’s LTL operations last saw substantial growth less than a year ago when it scored assets previously controlled by bankrupt LTL carrier Yellow Corp. when that company’s assets hit the auction block. In the auction’s first round, Knight-Swift spent $51.3 million for 13 former Yellow properties, the fourth-largest haul in that round. Later it spent $2.2 million to take over the leaseholds on 10 properties. In a third auction win, Knight-Swift acquired two leased terminals in Great Falls, Mont., and East Wenatchee, Wash., for $417,150.
Before the Dependable deal, Phoenix-based Knight-Swift operated 133 terminals and 5,100 doors, Hoexter said, including the former Yellow assets.
Knight-Swift Transportation Holdings Inc. (KNX) is excited to announce the acquisition of Dependable Highway Express (DHE), the LTL division of Dependable Supply Chain Services.
— Swift Transportation (@SwiftTransport) July 30, 2024
Welcome to the Knight-Swift Family!
Read More Here: https://t.co/H3vradh1Hd pic.twitter.com/QHW14DqE5F
Factoring in the Dependable assets, Knight-Swift said its network will be able to serve about 70% of the U.S. population. But the company’s appetite for growth is not confined to LTL. Knight-Swift’s core truckload operations expanded in March 2023 through the $808 million acquisition of U.S. Xpress. That deal added 7,200 tractors and 14,400 trailers to the company’s fleet.
Knight-Swift saw revenue in the second quarter of 2024 rise 18.9% year on year to $1.85 billion from $1.55 billion. Truckload segment revenue increased 30% in Q2 to $1.1 billion from $829.4 million in the same period a year earlier.
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Treasurer Brad Stewart said during the company’s July 24 quarterly earnings call that revenue was stronger in the LTL segment of the market compared with the truckload arena.
“In general, our truckload, logistics and intermodal segments continue to navigate a challenging full truckload market,” Stewart said. “Freight rates have largely stabilized, but at unsustainable level.”
He added, “The LTL segment continues to experience a much more supportive market where rate increases remain consistent. The combination of seasonal demand improvement, stable pricing and moderating cost inflation supported sequential improvement in operating results across our businesses during this quarter.”
Dependable Highway Services, based in Los Angeles, will continue to run drayage, ocean and air, warehousing, and distribution plus third-party logistics operations. (Dependable Supply Chain Services via Facebook)
On the same call Miller said, “For the truckload segment, demand has yet to truly break out and further attrition of excess capacity is still needed. We have a long way to go to return to our target levels of performance, but it is starting to feel like the bottom is behind us for this cycle.”
Los Angeles-based DHE will continue to run drayage, truckload, ocean and air, warehousing, and distribution plus third-party logistics operations following the Knight-Swift deal.
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