Upon purchase of UPS’ freight brokerage operation, RXO will become one of the largest providers of brokered transportation in North America.
Tech-enabled brokerage platform RXO will buy UPS’ freight brokerage operation for $1.025 billion in cash to enhance its market position, diversify and expand its customer base and broaden its carrier network.
Upon closing the acquisition of Chicago-based third-party logistics provider Coyote Logistics, expected by the end of the year, RXO says it will be the third-largest provider of brokered transportation in North America. Under the terms of the agreement, RXO will continue to serve UPS’s brokered transportation needs under a contract that runs through January 2030.
Meanwhile, UPS officials said the sale will allow the company to refocus on its core business as a small package provider and logistics partner.
Coyote Logistics generated approximately $3.2 billion in revenue in 2023 with approximately $470 million in gross margin and approximately $86 million of adjusted EBITDA. The company manages about 10,000 loads per day and works wil 100,000 network carriers, UPS officials said in a news release.
“The addition of Coyote’s customer base will diversify RXO’s vertical mix and will increase the number of customers that do more than $1 million in business with us by approximately 80%,” RXO CEO Drew Wilkerson said in a June 23 news release. “This acquisition will provide RXO with both immediate and long-term opportunities for revenue and earnings growth.”
RXO was formed in 2022 out of XPO Logistics, which was launched by Brad Jacobs, who this year announced his entrance into the building products distribution industry with the formation of QXO.
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Vesna Brajkovic
Vesna Brajkovic is MDM’s Senior Editor, having joined the company in May 2023. She has more than seven years of experience as a B2B publication editor, having focused on the commercial trucking, railroad, transit, fleet maintenance, automotive aftermarket and aviation industries. Brajkovic most recently spent the past two-plus years as Managing Editor of Heavy Duty Trucking for Bobit Business Media — where she reported and edited news and features on the commercial trucking industry, managed eNewsletters and social media, coordinated print magazine production and developed content for events and multimedia such as podcasts and videos. She can be contacted at vesna@mdm.com.
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