Intermodal shipping: Hub Group subsidiary acquires Challenge Transportation

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.

By ·

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, 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. Contact Jeff Berman

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!

Article Topics

Hub Group · All Topics
Latest Whitepaper
Face security threats head-on. Protect data beyond perimeter.
Traditional Data Loss Protection (DLP) solutions present a number of serious shortcomings and challenges for companies deploying them, creating a clear gap in the market.
Download Today!
From the January 2018 Logistics Management Magazine Issue
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and the most successful shippers will be those that are able to mitigate their impact on profitability. And, the right technology will play an increasingly vital role in driving efficiencies across the global logistics network.
The Future of Retail Distribution
Navigating the Reverse Supply Chain for Connected Devices
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Securing IoT data across the connected supply chain
Learn why a holistic approach to IAM is the most effective way to govern access to your systems and information requested by your partners, vendors, customers, and connected devices.
Register Today!
EDITORS' PICKS
State of Global Logistics: Delivering above and beyond
Industry experts agree that costs across all sectors worldwide will continue to rise in 2018, and...
2018 Rate Outlook: Economic Expansion, Pushing Rates Skyward
Trade and transport analysts see rates rising across all modes in accordance with continued...

Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...