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

Coming off of 2014, which in many ways is viewed as a banner year for freight, it appears that some tailwinds have firmly kicked in, as 2015 enters its official homestretch, according to Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics (SOL) Report at last week’s CSCMP Annual Conference in San Diego. The SOL report is sponsored by Penske Logistics.

The average price per gallon for diesel gasoline increased 1.6 cents to $2.492 per gallon, according to data issued by the Department of Energy’s Energy Information Administration (EIA) this week.

The planned $4.8 billion acquisition of Netherlands-based TNT-NV and a provider of mail and courier services and the fourth largest global parcel operator, by FedEx may be showing signs of coming closer to fruition, with TNT’s shareholders formally giving their blessing on the proposed deal.

Con-way Freight, the less-than-truckload (LTL) subsidiary of transportation and logistics service provider Con-way, recently announced it plans to implement a general rate increase for non-contractual freight, effective October 19.

The index ISM uses to measure non-manufacturing growth—known as the NMI—came in at 56.9 in September (a level of 50 or higher indicates growth), a 2.1 percent decrease from August’s 59.0, and 3.4 percent off from July’s 60.3, which is its highest reading since January 2008.

Article Topics

News · Hub Group · All topics


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