Descartes acquires airline mail tracking firm for $25.5 million

Canadian logistics software provider Descartes Systems Group Inc. said today it had bulked up its portfolio of cross-border e-commerce management tools by acquiring Velocity Mail, a provider of mail and parcel scanning and tracking solutions for the air freight sector.

Waterloo, Ont.-based Descartes paid $25.5 million for Velocity Mail, a Denver company whose electronic transportation network connects commercial airlines and their logistics partners with government postal authorities around the world, the firms said in a statement.

Global air carriers use Velocity Mail's network to leverage mobile devices to track shipments and deliveries in real-time, Descartes said. The platform automates the shipment process from route generation to accounting reconciliation, simplifying operational processes for the air carriers, ground handlers, and postal authorities, according to Velocity Mail's website.

Descartes plans to merge Velocity Mail with the company's Global Air Messaging Gateway, the company said. That combination will allow air carriers to use a single platform to manage the lifecycle of shipments including e-commerce focused mail and parcel shipments as well as larger freight shipments, according to Descartes.

"The growth of ecommerce has fuelled an increase in the market for Velocity Mail's solutions," Ken Wood, Descartes' executive vice president of product management, said in a statement. "Global air carriers need to have access to timely and reliable information about the movement of mail and parcel shipments to operate efficiently and meet postal authority service level agreements."

"This is right in their sweet spot. They are acquiring a company that helps them grow their network," said Steve Banker, vice president of supply chain services at ARC Advisory Group, a Dedham, Mass., management consulting firm. Descartes offers customers access to a suite of supply chain visibility tools it calls the "global logistics network," a collaborative web of logistics firms that pool their standards to facilitate global shipping and compliance through digital data exchange, the firm says.

"Acquisitions are a core competency for Descartes," said Banker, noting that the firm has increased its capabilities through strategic purchases of small technology firms in recent years. Those acquisitions include its 2017 purchases of truckload visibility technology provider Macropoint LLC and parcel-shipping platform provider ShipRush, and 2018 acquisition of transportation management systems (TMS) provider Aljex Software Inc.