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Transplace, Celtic International team up to create combined logistics services and intermodal entity

By Jeff Berman, Group News Editor
October 14, 2011

Taking steps to expand its extensive logistics services menu for shippers, non asset-based third-party logistics (3PL) services provider Transplace said this week it has joined forces with Chicago-based intermodal marketing company (IMC) Celtic International to “form a leading North American logistics provider,” according to company officials.

While each company will maintain its separate presences in the marketplace, they said that the combined company will have revenue north of $1 billion, coupled with a strong presence in transportation management, logistics technology, intermodal services, and truck brokerage.

In an exclusive interview with LM, Transplace CEO Tom Sanderson said that Rich Hyland, Celtic International president, has built a very strong intermodal business, explaining that when Transplace met with Hyland earlier this year, the concept of meshing the companies made sense on various levels.

“It is sort of like a three-legged stool,” explained Sanderson. “One being Transplace’s strength in the contract logistics management, contract transportation management, and freight brokerage areas. Having that intermodal leg would really be beneficial to Transplace, and Rich was saying that same thing in that Celtic was really strong in intermodal and was starting to grow its brokerage business and likes the contract logistics space. We thought that these two companies together really have more strength than they do on their own.”

Celtic International is an asset-light IMC and leverages Union Pacific’s roughly 70,000 container pool for its Western U.S. intermodal movements. In this part of the country, companies using their own assets run intermodal services through BNSF Railway and back East they can use either CSX or Norfolk Southern, regardless of equipment strategy.

At this point, Sanderson said Transplace does not feel it is necessary to have its own containers or chassis.

Intermodal has been gaining in popularity as an attractive supply chain strategy for shippers in recent years as they can see significant fuel savings in exchange for a longer transit time. In recent weeks, U.S. intermodal volume levels have set 2011 records and been at its highest levels since 2007.

Sanderson said this deal will provide tremendous opportunities for Transplace customers to grow their intermodal operations in the Eastern two-thirds of the U.S.

“Intermodal for a number of years has owned transcontinental freight market, but the Eastern two-thirds is really a great growth opportunity going forward,” he said. “CSX and NS have done a lot of work to clear double-stacked container height along their networks, which presents great opportunities. For our customers, what that means is we can divert truck freight to intermodal freight there, save customers money, and reduce fuel usage. It is also a cleaner solution from an environmental perspective.”

What’s more, the combination of Transplace and Celtic together for a true door-to-door intermodal service, with Transplace arranging drayage on each end for containers and chassis and negotiating with the rails will be much more effective in driving intermodal growth in the Eastern U.S.

For Celtic’s customers, he said they will be able to benefit from what Transplace offers through its contract logistics management services and the technology Transplace brings to shippers, as well as its strength in Mexico and cross-border operations, which the combined entity can offer as a service for Celtic’s customers. Another line of business Celtic can leverage is Transplace’s ocean forwarding group.

Another benefit of this partnership is Celtic’s Chicago-area headquarters, noted Sanderson, which he said will be beneficial in serving shippers as well as recruiting talent for the combined organization.

And the combination of both logistics management, intermodal and truck brokerage services as a non asset-based 3PL is something which can be viewed as a major competitive advantage, he said.

“There are [tons]of players that provide truck brokerage but not many in the intermodal space, aside from those that deal with an IMC like J.B. Hunt or Hub Group and attach a margin on that business,” explained Sanderson. “I am not sure that is a great long-term strategy. That ability to provide a true door-to-door product with intermodal and logistics management capabilities is what sets us apart from big asset-based 3PLs in the truckload and intermodal and dedicated sectors, as well as brokers.”

“Transplace has been working on expanding its transactional transportation management business and the acquisition of Celtic is a natural step in this direction,” said Evan Armstrong, president of Armstrong & Associates, a Stoughton, Wisconsin-based supply chain consultancy. “It adds to Transplace’s expanding over the road freight brokerage operation and gives them an entrée into the rapidly growing intermodal rail market. The acquisition helps to further round out Transplace’s in-house transportation management capabilities and service offering.”

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).


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