Overnite gets ready for UPS Freight transformation

By Jeff Berman and Sarah Bowling -- Logistics Management, 3/1/2006

ATLANTA, Ga.—UPS announced earlier this month that effective May 1 it will rename less-than-truckload (LTL) carrier Overnite Transportation as UPS Freight. Overnite's facilities and fleet, including some 22,000 trailers, will be rolled into UPS Freight over the next few years.

UPS acquired Overnite and its Motor Cargo subsidiary, a regional carrier operating in the western United States, in August 2005. The transition to UPS Freight will include restructuring Overnite and Motor Cargo into a single integrated network.

The unified freight network will allow both UPS and Overnite to improve some service offerings, said Overnite Media Director Ira Rosenfeld. "This is expanding the base on both sides—Overnite can now tap into the complete transportation solution network of UPS, and UPS now has a large ground freight network."

Heavy freight has been a small percentage of UPS' overall business, but the company is placing greater emphasis on that segment. One reason: The Overnite initiative eventually will help UPS better compete with FedEx Freight, said Donald Broughton, a transportation analyst with A.G. Edwards and Sons Inc. Still, the planned changes will not immediately alter shippers' delivery options, he said. "The name has changed, but that is it for the moment."

What will change, Broughton predicted, is Overnite's efficiency and ability to compete with other LTLs. "UPS has proven themselves to be some of the finest operating engineers in the industry and the world," he said. "Overnite was a fine LTL carrier before UPS acquired them, and it is already well-run, but UPS will find ways to make it better. Improvements made by UPS Freight will definitely affect and put pressure on the marginal LTL players in the marketplace."