Just weeks after Yellow Corp. announced that it intended to purchase Roadw ay Express, uniting two of the largest longhaul less-than-t ruckload (LTL) carriers in the country, the industry was rocked by another announcement that could change the competitive landscape: Overnite is on the block again.
Last month, Overnite's parent company, Union Pacific Corp., announced that it intended to sell the trucking company through an initial public offering. This is not the first time UP has attempted to sell Overnite. The Richmond, Va.-based company was briefly on the block several years ago, but UP pulled back when it appeared it could not get the price it wanted for the business.
Union Pacific says that Overnite, through its subsidiaries Overnite Transportation Co. and Motor Cargo Industries, is one of the largest less-than truckload carriers in the United States with 208 service centers and a fleet of over 6,000 tractors and 21,000 trailers. The carriers provide coverage to all 50 states.
Overnite has been relatively successful financially during the economic downturn of the last two years. In July, the trucker said that its operating income and revenue for the first half of the year represented its best six-month performance since 1994.
Like its competitors, Overnite has made efforts to reduce transit times on many of its lanes. In its July earnings announcement, the carrier said it had reduced transit times on 2,900 lanes since January. It also said it had improved its West Coast coverage with the opening of a service center in Simi Valley, Calif.
How the sale would affect the truckers' operations was unclear: In a letter to customers following the announcement, Overnite's senior vice president of sales and marketing, John Fain, said that Securities and Exchange Commission rules prohibited detailed discussions of company plans during a mandated quiet period.