UPS has acquired British firm Freightex to gain entry into the European truck brokerage market. This comes eight months after FedEx closed its acquisition of Netherlands-based TNT Express. To learn more about this latest deal, Multichannel Merchant spoke with Jodi Navta, Chief Marketing Officer, Coyote Logistics, an asset-light trucking firm that UPS acquired in 2015.
MCM: Why this acquisition and why now?
Navta: UPS believes there is a significant market opportunity in the U.K. and Europe to expand the truckload freight brokerage business. This opportunity was identified by the leadership team at Coyote in advance of our acquisition. UPS evaluated the best approach and best timing to expand the Coyote-type brokerage model using its existing technology platform and business processes.
Organic and acquisition approaches were considered. Ultimately Freightex provides a great catalyst to expand the business more efficiently than building internally, since we are acquiring existing customer and carrier networks and extensive employee knowledge about EU transport requirements.
MCM: What part did the growth in cross-border ecommerce play in this acquisition?
MCM: Ecommerce is not directly a factor. We see broad opportunity in Europe for all kinds of shipping customers to benefit from a brokered freight product and service solution.
MCM: How does this acquisition position UPS against FedEx and TNT?
Navta: UPS continues to invest more than $2 billion in Europe. UPS also recently announced acquisition of 14 new jumbo freighter airplanes to meet increased international air shipping demand. The company remains focused on its customers and providing them with access to the world through an integrated global network to meet their daily demands. UPS has built its network through organic growth and strategic acquisitions and expects to continue this approach.
MCM: How will Freightex integrate with Coyote, and what benefits are gained?
Navta: Similar to Coyote, Freightex has very strong proprietary technology with a similar type of truck matching capability and visibility tools. Freightex will have access to implement the Coyote platform, taking into account the best features of the Freightex system, for consistency and ease of use for all of our customers and carriers.
MCM: How does this enable UPS to expand its freight network in Europe?
Navta: It gives our customers access to a pan-European brokerage solution for their shipping and backhaul needs as part of our multi-modal network of transportation options. We’ll be in a better position to offer competitive shipping that may include some air, ground and brokered ground, so this adds another option for customers.
Existing Freightex customers will also benefit from the breadth of UPS shipping products and integration with Coyote-brokered transportation offerings in North America. Freightex will also access Coyote’s suite of technologies for matching outgoing loads with available carriers and for customer reporting to problem-solve for greater efficiencies.
MCM: Talk about the fragmented European trucking market and how this differentiates UPS
Navta: Europe is a grid of interlocking nations with unique languages and customs, creating a challenging environment for small brokerages to scale up, especially given dynamic market conditions and consumer expectations. Freightex is based in the UK but maintains offices in Poland and Hungary, and has employees that speak several languages. It also has deep experience in European supply chains plus regional knowledge and expertise to execute across the continent.
Previously, it lacked the resources to capitalize on the fragmented European 3PL market. UPS has the resources and customer base to disrupt that market. The scale of UPS, the technology and 3PL industry knowledge of both Coyote and UPS, and the European industry expertise of Freightex will create a seamless truckload brokerage experience for customers as globalization increases the need for outsourced logistics functions.