Subscribe to our free, weekly email newsletter!


3PL news: Road Runner Transportation Services to acquire Prime Logistics

By Jeff Berman, Group News Editor
August 26, 2011

Non asset-based third-party logistics services provider Road Runner Transportation Services (RRTS) continued its aggressive rate of acquisitions this week, announcing it has entered into a definitive merger agreement to acquire the outstanding stock of Prime Logistics Corporation for roughly $97.5 million.

The acquisition is expected to close on or before September 15, subject to customary closing conditions, according to RRTS officials.

As a non asset-based provider of logistics and freight consolidation, Prime had roughly $67.5 million in 2010 revenues. Its customers are primarily made up of food producers who ship more than 1 billion pounds of product to retailers, distributors, and warehouses. Prime has more than 2 million square-feet of facilities, with its service menu comprised of freight consolidation, inventory management, warehousing, order fulfillment, and less-than-truckload and truckload services.

“Prime’s service offerings are designed to give customers the cost benefit of shipping truckloads into Prime, with Prime shipping outbound freight to end destinations through consolidation with other shippers’ products, which Prime does through its warehouse locations by shipping multiple customers’ goods to the same address or location,” said RRTS President and CEO Mark DiBlasi on a conference call.

Prime is able to achieve cost savings for its customers while exceeding the requirements imposed upon it by those customers, which include large retailers like Wal-mart, Costco, and Target, among others.

Other benefits of Prime’s service offerings for shippers cited by DiBlasi include shipping cost savings, reduced transit times, more effective inventory management, order fill rates in the 96 percent-to-100 percent range, as well as help shippers reach specific delivery dates required by large mass merchandisers they do business with.

This deal follows recent acquisitions made by RRTS, including: February’s acquisition of Morgan Southern, a privately-held provider of intermodal transportation and related services for roughly $20 million; May’s acquisition of Wichita, Kansas-based truckload services provider Bruenger Trucking Company; and July’s acquisition of The James Brooks Company is a provider of intermodal transportation and related services for the ports of Los Angeles/Long Beach and Oakland.

“RRTS is capable of folding in small acquisitions that can improve scale, geographic reach, and service capabilities,” wrote Robert W. Baird & Co. analyst Jon Langenfeld in a research note. “We look for RRTS to acquire one to three targets annually that could each add $30-50 million in revenue…while expanding density, most likely within its TL Brokerage and TMS segments.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Earlier today, the United States Senate signed off on a six-year surface transportation authorization, according to various media reports. The bill, entitled the Developing a Reliable and Innovative Vision for the Economy (DRIVE) Act, passed by a 65-34 margin and comes at a time, when the most recent extension for surface transportation funding expires tomorrow, July 31.

Demand for the $500 million in available funding for the United States Department of Transportation’s TIGER (Transportation Investment Generating Economic Recovery) competitive grant program was easily trumped, with applications for the seventh round of TIGER grants coming in at $9.8 billion, or nearly twenty times the available amount, DOT said this week.

Global logistics managers will be tracking the progress of the controversial Trans-Pacific Partnership (TPP) talks in Maui, Hawaii this week, as negotiating parties hope to finalize the agreement.

As has been noted in recent coverage on this site in regards to Peak Season, one underlying theme has been, and remains, how Peak Season is not what it used to be. That is not to say there will not be any Peak Season-related activity. Make no mistake, there will be and things driving it from the seasonal nature of business activity and cargo flows to higher demand and increased e-commerce activity, among others.

UPS Access Point locations serve as a replacement delivery address when consumers are not at home to receive a package or when consumers want a delivery to go somewhere other than their residence.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA