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
Supplier Relationship Micro Management
Optimizing Across Six Guiding Principles
Download Today!
From the July 2017 Logistics Management Issue
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish demand and political doubt. The result: “cognitive dissonance” that finds a $1.4 trillion market scratching its head.
2017 Truckload Brokerage Roundtable: Technology continues to connect the dots
Cloud Transportation Management Systems (TMS): Weis Markets streamlines “both sides” of the DC door
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Women in Logistics: Breaking Gender Roles to Win the War for Talent
In this session you'll hear from a panel of women who are now leading top-level logistics and supply chain operations. The panel will share their success stories as well as advice for women who are now making their way up the ladder.
Register Today!
EDITORS' PICKS
28th Annual State of Logistics: Into the great unknown
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...