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Home » Hub Group acquires Exel Transportation Services
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Hub Group acquires Exel Transportation Services

April 4, 2011
Mark B. Solomon
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The Hub Group Inc., one of the nation's leading intermodal marketing companies, said today it has acquired freight management company Exel Transportation Services for $83 million in cash, a move that will expand Hub's presence in both intermodal marketing and truck brokerage.

Under terms of the acquisition, Exel will become a wholly owned subsidiary of Hub, but re-branded as Mode Transportation. The new subsidiary will remain based in Dallas.

The acquisition creates a company of approximately $2.4 billion in annual gross revenue, with Hub the larger of the two with 2010 revenues of $1.83 billion. Exel works almost exclusively through agents and sells primarily to small to mid-sized shippers. Hub, by contrast, employs a staff-based model and markets mostly to larger businesses.

The combined company will account for about 20 percent of the U.S. intermodal market, with Hub accounting for about 16 percent and Exel the remaining 4 percent. Exel's truck brokerage business is slightly smaller than Hub's.

The acquisition comes at a time of expected consolidation among domestic intermodal marketers, especially as relatively small asset-light providers struggle to compete with the likes of asset-based behemoths like J.B. Hunt Transportation Services Inc. and Schneider National Inc. Smaller marketing companies like Exel may also find it more difficult to secure adequate and reliable capacity in an environment where space is constrained, analysts contend. The top five companies control 75 percent of the domestic intermodal market, according to Robert W. Baird & Co., a Milwaukee-based investment firm.

Hub continues to benefit from strong demand and firm pricing for its services; fourth-quarter demand, for example, rose 14 percent year over year and the company expects double-digit top-line growth well into 2011.

Transportation Intermodal Transportation 3PL
KEYWORDS Exel Hub Group J.B. Hunt Schneider National
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    Marksolomon
    Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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