Truckload and logistics giant Schneider National Inc. moved today to fill a gap in its product portfolio by acquiring two companies, less-than-truckload (LTL) and truckload carrier Watkins & Shepard Trucking Inc. and IT provider Lodeso Inc., that focus on the residential deliveries of outsized commodities. Terms of the two transactions were not disclosed.
The agreement will give Green Bay, Wis.-based Schneider a national presence in the segment of "final-mile" transportation that touches the residential end customer, according to Mark Rourke, the company's executive vice president and COO. Until now, Schneider had a relatively small regional footprint in the market, which is growing rapidly in conjunction with the explosive growth of e-commerce.
Schneider chose to grow the business through acquisition because it was too time-consuming and cumbersome to expand its network capabilities on its own and do it region by region, Rourke said. Founded in 1974, Watkins & Shepard employs nearly 800 drivers working out of 20 U.S. terminals.
"We will bring scale, resources, and investment" to the operations of the two companies, Rourke said in a telephone interview.
Watkins & Shepard CEO Ray Kuntz said he would welcome Schneider's deep pockets. "We are facing a large increase in demand for our services, and that requires investment in people, equipment, and facilities," Kuntz said today in a statement announcing the acquisitions.
Schneider is particularly eager to penetrate the delivery market for furniture and carpeting, high-value, outsized commodities that are increasingly being purchased online instead of in retail stores, Rourke said. Though deliveries can originate from various origins, the common denominator is that they will be bound for a residence, Rourke said.
Schneider already has a $700-million-a-year business delivering from factories or DCs to retail stores, Rourke said.
The companies will become part of Schneider's "Final Mile+" product line, which falls under the company's dedicated carriage division. For the time being, they will continue to operate under their own brands, Rourke said.
Missoula, Mont.-based Watkins & Shepard and Zeeland, Mich.-based Lodeso already collaborate in the final-mile delivery process. Lodeso's technology platform receives and processes online orders from retailers and manufacturers and connects those requests with an agent network of about 600 carriers, one of which is Watkins & Shepard.
Lodeso will continue to operate its agent network because it will give retailers and manufacturers—the folks paying the bills—greater flexibility in how their goods get moved, Rourke said.
Privately held Schneider has annual revenue of about $4 billion.
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