Warehouse Services Inc., known as WSI, acquired El Paso, Texas-based Sky Transportation Services as it aims to expand its cross-border transportation services with Mexico.
The women-owned 3PL with a corporate headquarters in Piedmont, South Carolina, announced last month that it completed the deal, which “is expected to add over $60 million in annual revenue to WSI in 2023,” according to a news release.
Albert Luna, CEO and founder of Sky Transportation Services, is staying in his leadership role, and the brand will remain, according to the company.
Trucking Dive talked with WSI Chief Operating Officer Steve Magruder on Friday about the deal, which involved Sky Trans Group Holdings. The 3PL executive detailed what’s changing for the firm and what’s next.
Editor’s note: This interview has been edited for brevity and clarity.
Trucking Dive: How many trucks and drivers did you add with the deal?
Warehouse Services Inc.’s Magruder: We should be up around 700 power units across our transportation operations, inclusive of Sky, [adding] about 150 drivers.
TD: How much of an impact, if any, did the uptick in cross-border freight traffic have on the acquisition?
WSI: It's been a strategic kind of target for us to expand that service offering. We partner with some Mexican companies today to do some cross border, but it's pretty small in scale compared to what Sky’s doing. So this certainly ramped up our that capability with the multiple partners that they're working with. That was definitely a strategic enhancement that we were looking to achieve.
TD: What was your footprint in Mexico on cross border like previously?
WSI: Pretty small. We have a pretty large bulk tanker fleet. And we were running some bulk tankers down into some of the manufacturing operators down there, servicing them with dry pellet plastic products. But as a piece of our business, it was pretty small. It was just kind of a little more ad hoc as our customers needed that type of service.
TD: Is the whole nearshoring aspect something that's factoring into this?
WSI: It was a piece of it. We have existing customers that have manufacturing facilities in Mexico. A bigger piece for us was, ‘How do we expand our service offerings to those customers?’ But certainly as a sidebar, we certainly see that [nearshoring] as a movement that we'd like to be in a position to take advantage of.
TD: When was WSI’s last acquisition, and what sort of factors are most important in these types of deals?
WSI: Our last acquisition before this was in the fourth quarter of ’21. This company was a little more diverse, where they did some dedicated transportation, public warehousing, dedicated warehousing; they had a brokerage operation, and they had an in-house IT software group out of Minneapolis.
And one of the things we look for is really well-run companies. We're not turnaround specialists. We're looking for companies that have talent, have a pretty long, you know, successful history, that ... maybe have service offerings that we don't have or geographic locations where we are not located currently. And then culture is a big fit for us. We're a family-owned company, been around for 37 years, and we want similar values in the companies we look to acquire.
TD: Does the company plan to make another acquisition or other acquisitions over the next year?
WSI: We have some targets. I mean, we are still acquisitive. Nothing that's to an LOI or an IOI state, just kind of more preliminary discussions. But we're still looking for opportunities out there.