UPS to Buy Overnite

United Parcel Service is buying Richmond, VA-based Overnite Corp for $1.25 billion. The acquisition will enable UPS to expand its ground freight services in North America—specifically its less-than-truckload (LTL) services. “This certainly puts us on the map in LTL, an arena we have not played in at all previously,” says UPS spokesman Norman Black. ( shipping allows companies whose volume isn’t enough to fill an entire truck to “co-ship” with other companies bound for the same destination, saving them money.) “Since we went public in 1999, we have purchased about 30 companies in an effort to offer our customers as many different logistical options as possible,” Black adds.

Once the deal closes, which will likely be in the third quarter, UPS will rival Overland Park, KS-based Yellow Roadway Corp., a leader in LTL transport. It also enables UPS to heat up its rivalry with FedEx Corp.

“This deal puts us in another area of direct competition with FedEx, but clearly we have other concerns,” says Black. “This is just another piece of the puzzle as we try to offer our customers a variety of services– everything under one roof.” Last year UPS acquired air freight specialist Menlo Worldwide Forwarding for $150 million.

Overnite posted a net income last year of $63.3 million on sales of $1.65 billion. Overnite’s current management team is expected to remain in place once the deal is completed.

Partner Content

The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.
Strategies for Maximizing Mobile Point-of-Sale Technology - NetSuite
Learn the top five innovative ways to utilize your mobile POS technology to drive customer engagement, increase sales and elevate your brand.