Trucking and intermodal giant J.B. Hunt Transport Services Inc. said today it has acquired dedicated contract carrier and pool distribution specialist Specialized Logistics Dedicated LLC (SLD) for $136 million, a move Hunt said deepens its dedicated operations, elevates its standing in pool distribution services, and allows customers to deploy more big and bulky e-commerce shipments into its network.
Based in Houston, SLD provides pool distribution services throughout North America using 14 terminals and fulfillment centers and a fleet of more than 200 power units. Under a pool distribution model, freight is delivered on behalf of multiple shippers from DCs to store locations via specially designated pooling points. The pool distributor receives the shipments, processes and sorts the packages based on their final destinations, and then loads trucks for deliveries to the customers' stores within specific geographies.
The strategy, best suited for specialty retailers that generally have all their inventory on store shelves rather than in back rooms, provides retailers with delivery economies of scale they can't get with less-than-truckload (LTL) or parcel services.
Hunt President and CEO John Roberts said the acquisition will also open up opportunities for the company to offer so-called last-mile deliveries of online orders of heavy, outsized goods. Though most e-commerce orders are still comprised of parcels processed through conveyor systems, there is a growing demand for the handling of larger non-conveyable consignments as retailers broaden their portfolios of products that can be purchased online. Truckload carriers may need to deepen their penetration of e-commerce as retail distribution shifts from a distribution-center-to-store move—truckload's bread-and-butter—to deliveries from fulfillment centers to residences.
Truckload carrier executives have said that e-commerce holds significant potential for deliveries on high-density traffic lanes.
The acquisition will also broaden Lowell, Ark.-based Hunt's dedicated contract services operation, its second-largest business unit behind intermodal. In the second quarter, SLD generated $412 million in revenue, up 8 percent from the year-earlier quarter.