Menlo, Schneider buy Chinese 3PLs

Menlo, Schneider buy Chinese 3PLs Menlo Worldwide and Schneider Logistics separately announced deals today to expand their capabilities in China, part of a small, but growing trend of prominent U.S.-based logistics companies buying Chinese firms to expand their reach in the growing domestic Chinese distribution market as well as provide customers direct export service from China or import service to the country.
   Third-party logistics provider Menlo Worldwide said it has completed a deal to acquire Chic Holdings and its asset-light operating companies Shanghai Chic Logistics and Shanghai Chic Supply Chain Management for $60 million in cash. The contract includes an incentive clause under which Menlo could pay Chic owners more money based on the company’s performance.
   Chic provides distribution, warehousing and transportation management in 78 cities and had revenue of $55.2 million in 2006, up 40 percent from the previous year. Combined the two companies will have 180,000 square feet of warehouse space and 1,500 employees under management. Chic has warehouses in 16 cities.
   “This is the most strategic acquisition in Menlo’s history. With Chic Logistics’ domestic capabilities and network, we immediately become a major player in the intra-China market — the next great growth engine for transportation and logistics,” Menlo President Robert Bianco Jr. said in a statement.
   San Mateo, Calif.-based Menlo, part of the Con-way family of freight distribution companies, has existing operations in China, but the acquisition will greatly expand its domestic network and provide local expertise.
   As with Schneider Logistics and YRC Worldwide, U.S. trucking and logistics firms that have recently acquired Chinese freight forwarders and logistics providers, Menlo is marketing its ability to provide pick-up at origin and control shipments all the way to the final destination. Another trucking company, Werner Enterprises, has also set up an operation in China.
   Last week Menlo completed the acquisition of Cougar Express Logistics of Singapore as part of a broader Asian expansion program.
   Chic officials said the link-up with Menlo will give their two-dozen primary customers more opportunities to reach new international markets with a broader range of services.
   Menlo said it expects to finalize the deal before the end of the year.
   Meanwhile, Green Bay, Wis.-based Schneider Logistics said it has bought the operating assets of privately held BaoYun Logistics.
   BaoYun, based in Tianjin, is ranked 66th among China’s top 100 logistics firms. It provides warehousing and other logistics services. According to Hoovers corporate research service, BaoYun Logistics has annual sales of $37.5 million.
   Schneider operates a supply chain consulting firm based in Shanghai, and earlier this year launched Schneider Logistics (Tianjin) Co., which provides trucking and logistics service for the Chinese market. Schneider began operating in the Chinese port city with about 50 trucks.
   Schneider Logistics, a subsidiary of U.S. trucking company Schneider National, has made clear it intends to spend tens of millions of dollars to expand in China in the near future.
   BaoYun will become part of Schneider Logistics (Tianjin). Terms of the sale were not disclosed.