Dive Brief:
- Schneider National is open to buying more carriers to grow its dedicated trucking business, CEO Mark Rourke said during a Nov. 12 investor conference.
- Expanding the segment strengthens the company’s position for that type of business to provide more options for shippers, he said. Scale also creates business synergies, which can boost efficiencies and aid in controlling costs.
- “Our focus in the dedicated market is predominantly in the specialty equipment,” Rourke said during the annual Baird Global Industrial Conference. “We do believe that scale matters here.”
Dive Insight:
Schneider’s strategy for dedicated goes beyond just moving a 53-box from A to B, Rourke said. That distinction means providing value-added service.
Between 2022 and 2024, Schneider grew its dedicated segment by acquiring Midwest Logistics Systems, M&M Transport Services and Cowan Systems. Rourke said each acquisition had a specialty component, such as “lightweight equipment, relay networks or very-high touch, multi-stop retail type configuration that in a geography that’s hard to serve.”
But more importantly, Rourke said each merger deal included “very defensible three- to five-year contracts that allow us to get deep with our customer.”
The carrier’s truckload business was a bright spot in Q3, which reported a 17% year-over-year revenue increase. Schneider credited the boost to a 22% gain in dedicated freight volume from Cowan Systems.
While Rourke offered no specifics, he noted the company would like to do an acquisition every 12 to 18 months, though the carrier may not be able to keep that pace.
However, EVP and CFO Darrell Campbell said the company has a robust pipeline of acquisition targets. More carriers have been exiting the market, which suggests capacity is tightening.
“There’s opportunities to be opportunistic,” Campbell said of the current market, adding that “with more carriers struggling, there is an opportunity.”
