Union Pacific sells Skyway subsidiary

By Staff -- Logistics Management, 12/1/1998

The Union Pacific Corp. has sold Skyway Freight System, a multi-faceted logistics company based in Watsonville, Calif., to Genstar Capital Partners. Founded in 1977, Skyway was an early entry into the third-party logistics business. The company, which provides a variety of logistics-based services, now describes itself as a supply chain service company.

Skyway named Charles Lounsbury, former vice president of logistics for Toro Co., as president and chief executive officer, succeeding Kip Hawley. Lounsbury also previously served as president and chief operating officer of Leaseway Transportation Co. He spoke to Logistics Management & Distribution Report just three weeks after joining Skyway, as he prepared for his first strategic planning meeting.

Lounsbury said he expected Skyway to focus on its two core businesses. The first is the company's traditional provision of trucking service as a substitute for air freight. The second provides complex, information-based supply chain management services. "We're moving rapidly toward an inter-enterprise demand-chain vision," he said. "We're moving from [functioning as] a third party toward being a 'fourth-party' provider." That principally involves offering supply chain information management, with a focus on such areas as helping customers improve their cash-to-cash cycle.

Neither Union Pacific, which had purchased Skyway in 1993, nor Genstar released financial details of the deal, under which Genstar acquired full ownership interest in Skyway. Genstar is a private investment company with more than $220 million in capital investments.

Union Pacific's sale of Skyway comes as no surprise: The corporation had announced that it planned to focus more closely on its core railroad business. UP also had announced its intent to shed Overnite Transportation Co., its less-than-truckload subsidiary, but has temporarily taken the carrier off the market..