Subscribe to our free, weekly email newsletter!


Intermodal shipping: Hub Group subsidiary acquires Challenge Transportation

By Jeff Berman, Group News Editor
November 09, 2011

Freight transportation and logistics services provider Hub Group Inc. said this week that its Comtrak Logistics Inc. subsidiary, which offers national drayage and truckload services, has acquired certain assets of Newark, New Jersey-based intermodal drayage carrier Challenge Transportation.

Financial terms of the deal were not disclosed.

This marks the third acquisition Hub and its Comtrak subsidiary has made in the last 12 months as part of the company’s initiative of growing Hub’s North American drayage network.

In June, Comtrak acquired Domestic Transport Inc., a Pacific, Washington-based provider of intermodal drayage services.  And in early April the Hub Group acquired asset-light transportation company Exel Transportation Services (ETS), a subsidiary of Deutsche Post World Net, for $83 million. Exel Transportation Services was renamed at Mode Transportation.

With Challenge in the fold, Hub now has 26 full service terminals in its Comtrak network. Challenge has a 41-driver operation, handling container deliveries throughout the Northeast.

“We are focused on growing our drayage presence across the country and constantly evaluating acquisition opportunities,” a Hub official told LM. “We’ve known and worked with the company for a while now and were happy to reach this agreement with them. With the addition of this new terminal, we now have a strong base to start growing our presence in New Jersey, Connecticut, and the Greater New York City area.”

The official added that a Challenge has a roster of customers that nicely compliments Hub’s expertise.

Stifel Nicolaus analyst John Larkin wrote in a research note that his firm considers the acquisition of Challenge Transportation to be consistent with Hub Group’s objective of growing the percentage of its drayage that is provided internally.

Hub Group’s Comtrak segment handled about 57 percent of the company’s intermodal drayage as of late October and management has stated that its objective was to perform at least 60 percent of its drayage internally by the end of 2011, Larkin wrote.

“We believe the company’s expansion of its internal drayage services provide Hub Group with greater control of its intermodal service levels which is a major driver of the intermodal value proposition,” said Larkin.

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

The 'Internet of Things' or IoT is a term that has rapidly taken center stage in business and consumer technology circles, with tremendous amounts of hype in both. Don't be distracted if some of the hypothetical consumer examples of the IoT seem far-fetched; the trend has serious implications for businesses. This complimentary whitepaper takes a look at some of the opportunities afforded by the Internet of Business Things.

Of special interest to readers of Logistics Management will be “Americas Update,” which will look into the future of the market in the Americas and assess how firms will be able to favorably position themselves to compete and win market share.

After 20 years, two congressional mandates and countless lawsuits and lobbying efforts, safety advocates and the Teamsters union still say there are too many inexperienced rookie truck drivers hitting the road without sufficient behind-the-wheel training.

Congested U.S. port terminals, harbor and over-the-road truck and driver shortages, slower trains and longer rail terminal dwell times due to increased domestic rates have not only disrupted service but also driven intermodal rates and cargo handling costs up sharply.

Southern California shippers are getting a break on container dwell expenses for the next ten days as the Port of Long Beach announced that it had added an extra three days to the time that overseas import containers can remain on the docks without charge.

Article Topics

News · Hub Group · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA