freightex

US integrator and express operator UPS is set to expand its footprint in the UK-Europe trucking business with the purchase of UK haulage service provider Freightex.

Dover-headquartered Freightex  has no haulage fleet of its own, instead operating as a truck brokerage, offering shippers full truckload (FTL), less-than-truckload (LTL) reefer and specialised haulage services across Europe via a network of pre-vetted sub-contractors.

Founded in 2001, Freightex developed its own technology platform to match customer loads with available empty trailers from more than 1,000 sub-contractors ranging from the largest transport companies in Europe to small, family-run firms.

The acquisition immediately gives UPS scale in “the growing UK and European third-party logistics (3PL) over-the-road brokerage transportation market and launches a new global and regional UPS growth platform from an established base of customers and carriers”.

The deal mirrors its 2015 purchase of Coyote Logistics in the US for $1.8bn, which boosted UPS’s earnings by not only expanding trucking volumes but also by better managing transportation costs levied by sub-contractors. The Freightex purchase price has not been disclosed.

The Freightex deal can also be seen as UPS’s response to FedEx’s acquisition of TNT – which UPS was barred from buying by the EC’s competition watchdog This focused on TNT’s overland operations; the EC required TNT’s air express operations to be sold to a third party rather than Fed Ex.

Alan Gershenhorn, UPS chief commercial officer, said: “The UK and Europe are strategic 3PL freight brokerage growth markets for UPS and there is significant cross-border opportunity.

“This acquisition provides UPS customers with an immediate, knowledgeable and competitive UK and European presence.  We intend to align Freightex with Coyote for greater efficiency and continue to invest for further growth,” he added.

According to UPS, Europe’s 3PL market was worth $174bn last year, and it said the fastest growing sub-sector was freight brokerage, which “is expected to further expand as shippers and carriers further adopt the brokerage model”.

It said: “Brokered shipping services often provide greater efficiency brought about by higher fleet asset utilisation when compared with operating dedicated fleets.”

Mr Gershenhorn added: “UPS has many customers who will benefit from UK and European transportation brokerage capabilities.  We will provide added value, helping customers and carriers streamline operations and have simplified visibility through the same Coyote system that they use in North America.”

UPS said Freightex chief executive Tim Philips would continue in his current role. He said: “UPS and Coyote have industry-leading technology, a no-excuses customer service culture, and a proven record of success.  We will improve our efficiency through Coyote’s technology and use of the UPS network, while continuing to out-service the competition and provide results that customers count on us to deliver.”

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