On Monday, a Canadian mega carrier announced the acquisition of one of the largest trucking groups in the U.S.
On January 25, TFI International Inc. announced that the company had entered into an agreement to purchase UPS Freight, the less-than-truckload (LTL) and dedicated truckload (TL) divisions of United Parcel Service, Inc.
UPS Freight operates more than 7,000 power units and employs more than 7,800 drivers, according to the Federal Motor Carrier Safety Administration’s SAFER website.
TFI says that the purchase price was $800 million.
According to a news release from TFI, “approximately 90% of the acquired business will operate independently within TFI International’s LTL business segment under its new name, “TForce Freight”, while acquired dedicated TL assets will join TFI’s TL business segment.”
Alain Bédard, Chairman, President and Chief Executive Officer of TFI International, commented on the transaction, “We are pleased to announce this highly strategic transaction that will strengthen our service offerings to customers as well as our ongoing relationship with UPS. Our strategy of operating independent business units with a high degree of accountability is well-suited for building on UPS Freight’s strengths and improving margins over time. TForce Freight will continue to serve UPS’ ongoing LTL distribution needs, and UPS will continue to provide freight volumes and other services to TForce Freight after the transaction for a base term of five years. We also look forward to offering expanded strategic network opportunities to UPS in Canada. This transaction is a ‘win-win’, allowing TFI to continue our strategic expansion across the US and aligning with UPS’ ‘Better not Bigger’ strategic positioning.”
Bedard said that part of the acquisition will include “a network of 197 facilities (147 of which are owned), and 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.”
The transaction is expected to close in the second quarter of 2021.