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Home » Descartes acquires MacroPoint to expand role in truck visibility market
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Descartes acquires MacroPoint to expand role in truck visibility market

August 15, 2017
DC Velocity Staff
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Canadian logistics software provider Descartes Systems Group Inc. dramatically expanded its presence in the fast-growing truckload visibility market today by acquiring MacroPoint, LLC for $107 million in cash and stock, Descartes' 16th acquisition in less than four years and its most expensive purchase in 10 years.

Cleveland-based MacroPoint is considered the pioneer in business-to-business, location-based truck tracking services, where shippers, freight brokers and third-party logistics providers (3PLs) track the locations of truck deliveries in real time. In addition, MacroPoint leverages its tracking data to predict freight capacity availability so users can improve their load-planning capabilities.

MacroPoint's North American network spans approximately 2 million truck assets and drivers and connects to vehicles through multiple pathways, such as on-board electronic logging devices (ELDs), GPS-enabled smartphones, mobile phones, and transportation management systems (TMSes). MacroPoint has about $12.5 million in annualized revenues, based on Descartes' calculations made at the time of the purchase, which closed last night. Descartes paid $87 million in cash for MacroPoint and $20 million more in stock.

While still the market leader, MacroPoint's dominance is being challenged by companies like Chicago-based project44, Boulder, Colo.-based 10-4 Systems Inc., and Chicago-based FourKites Inc. MacroPoint and Four Kites have been involved in a protracted legal dispute that centered on Four Kites' unsuccessful challenge to invalidate two of MacroPoint's patents.

Descartes, which is based in Waterloo, Ont., has been involved in the trucking visibility space through its "Global Logistics Network," which connects truckload and less-than-truckload (LTL) carriers to customers via electronic data interchange (EDI) and other messaging protocols. The MacroPoint acquisition strengthens Descartes' asset-tracking and predictive-capacity capabilities, as well as the size of the vehicle and driver universe it will be able to reach, according to Mavi Silveira, a Descartes spokeswoman. Truckload visibility platforms have become a hot ticket, with one estimate pegging growth as doubling every three years. By accurately knowing their shipment's location before it arrives, shippers and intermediaries can reduce lead times, enable efficient cross-docking operations, and provide consignees with real-time status updates. In the past, this level of information was available only in closed-loop transportation networks, not across the common carrier universe.

Descartes' multi-year acquisition spree has been aimed at bulking up its global connectivity so it becomes the gatekeeper of choice for shipment information flowing across multiple geographies and all transport modes. "Descartes has a successful history of electronically connecting transportation providers to transportation brokers, logistics intermediaries, and shippers to share data, automate processes, and run more efficiently," said Edward J. Ryan, the company's CEO, in a statement.

MacroPoint CEO Bennett Adelson added in the statement that the combination will help customers "research, plan, execute and monitor multi-modal shipments around the world." Silveira, the Descartes spokeswoman, said it was unclear whether Adelson would remain with the company post-acquisition.

Technology
KEYWORDS 10-4 Systems Descartes Datamyne FourKites MacroPoint project44
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