We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
Home » Covenant's acquisition of Landair deepens exposure to dedicated contract carriage space
transportation

Covenant's acquisition of Landair deepens exposure to dedicated contract carriage space

July 6, 2018
DC Velocity Staff
No Comments

Covenant Transportation Group, Inc.'s $83 million acquisition of dedicated contract carriage and third-party logistics (3PL) provider Landair Holdings demonstrated that in a hot trucking market it may be necessary to buy and quickly ramp up expanded capabilities rather than try to grow them in-house.

The cash and debt acquisition of Greeneville, Tenn.-based Landair will vault Chattanooga-based Covenant higher into the ranks of providers in the dedicated business, today one of the fastest growing segments of trucking. Dedicated accounted for about $60 million of Landair's fiscal 2017 total revenue of $121 million, it said. About $41 million came from managed transportation, and the rest from one-way, irregular-route truckload operations. Covenant reported first quarter revenue of $150.4 million, excluding the impact of fuel surcharges. It does not publicly break out revenue by service category.

Landair operates about 430 trucks and 900 trailers. It also manages 12 distribution centers covering approximately 1.8 million square feet.

John Tweed will continue as Landair's president, and the company will keep its current headquarters, Covenant said yesterday in a statement announcing the deal. The results of Landair's transport unit will be folded into Covenant's truckload segment, while the results of Landair's logistics division will be reported within Covenent's managed freight segment.

David R. Parker, Covenant's chairman and CEO, said the company pursued Landair because of its "proven record of growth and profitability" in the dedicated and 3PL markets. Landair is a perfect fit with our strategy to grow in areas where we can get closer and more heavily integrated with customers," Parker added.

Demand for dedicated services, where a shipper outsources its fleet operations for a multi-year period to a specialist that dedicates rigs, trailers and drivers for the shipper's sole use, has increased significantly in the past year as shippers seek capacity assurance in a tight truckload market. According to a report published last month by consultancy Armstrong & Associates, Inc., 2017 gross revenues—revenues before the cost of purchased transportation--from dedicated services rose to $15.6 billion, up 10.2 percent from 2016 levels and much higher than the 7.5 percent compound annual growth rate reported for the segment since 1995.

Last month's annual State of Logistics Report, prepared by consultancy A.T. Kearney Inc. for the Council of Supply Chain Management Professionals (CSCMP) and presented by third-party logistics provider Penske Logistics, said users paid 9.5 more for dedicated contract carriage services in 2017 than they did in the prior year

The Landair deal is the largest in Covenant's 32-year history.

Trucking Truckload
KEYWORDS Armstrong & Associates Covenant Transport Inc. CSCMP - Council of Supply Chain Management Professionals Kearney La Poste Penske Logistics
  • Related Articles

    Hunt acquires Specialized Logistics Dedicated to grow dedicated, last-mile, pool businesses

    Knight-Swift makes second acquisition of 2021 to further grow its LTL network

    Lanehub unveils platform for shippers to market backhaul space to each other

Recent Articles by DC Velocity Staff

Artificial intelligence creates real encyclopedia

Freight sector missed the boat on strong U.S. economy in Q3 and Q4, FTR says

Sloppy thieves botch trailer heist

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Fred Smith is not worried about Amazon

  • Outlook 2023: What’s in store for logistics/supply chain?

  • Ports, maritime operators see tide turning as ocean freight tsunami subsides

  • In Person: Steve Beverly of Penske

  • InPerson interview: Rob McKeel of Fortna

Now Playing on DCV-TV

Eeafd0c7 0569 4a63 8b31 fdbc5322c7cd

Crown’s DualMode Automated Forklifts Revolutionize the Warehouse

DCV-TV 4: Viewer Contributed
As part of the company’s ongoing digitization efforts, DHL Supply Chain has deployed Crown’s DualMode automated reach trucks to help ensure resiliency in the supply chain, with reach trucks available 24/7/365. “AGVs provide a better quality of life for our associates on the floor,” says Gordon Hanthorn, Senior...

FEATURED WHITE PAPERS

  • The five best applications for robotic lift trucks in warehouse environments

  • Fulfillment Facility Improved Efficiencies by 4x

  • 3PLs: Complete Orders Faster with Flexible Automation

  • Reusable Packaging for the New Wave of Supply Chain Automation

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing