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SOAR, Network Transport merge into major reefer player

Series of mergers produced differentiated reefer solution

(Photo: Harrison White / FreightWaves)

A new major player in the world of temperature-controlled truckload transportation has emerged from a complex series of mergers and acquisitions. Asset-based reefer carrier SOAR Transportation Group out of Salt Lake City and freight brokerage Network Transport, based in Chattanooga, Tennessee, have merged in a deal put together by private equity veteran Marc Kramer.

Prior to that merger, SOAR acquired the 125-tractor reefer carrier Robert Heath Trucking out of Dallas, and Network had acquired American Logistics and Nav Logistics. All told, the combined operation runs 425 reefer tractors from Salt Lake City and Dallas and has three brokerage offices, in Chattanooga, Salt Lake City and Dallas. The assets operate under the SOAR brand while the three brokerage branches, now headquartered in Chattanooga, are branded as Network Transport.

Today the combined entity accounts for about $250 million in annual revenue, with approximately $120 million of that from the non-asset logistics side.

While SOAR and Network are branded separately and operate largely independently — though the assets do form a nice operational backstop to the truckload brokerage business — a team of four key executives oversees both businesses. Kramer is the majority shareholder of the combined entity. Cody Isaacson, who was the president of SOAR before the deal, will serve as president of both companies. Bob Poulos joined the company as chief commercial officer of both SOAR and Network after selling his stake in V3 Transportation, the expedited carrier he founded in 2013. James Kennedy will be the chief financial officer of both companies.

The seasoned leadership team at SOAR and Network prides itself on having a depth of experience as operators at very large trucking companies—with roots both in Swift and U.S. Xpress—as well as entrepreneurial chops. Each of the executives I spoke to had worked at a large transportation corporation and then started his own successful business. SOAR and Network view the combination of defined process at scale and entrepreneurial energy as the core DNA of the company.

How SOAR and Network will grow

The reefer fleet SOAR has a diverse customer base, but has the most density on I-40 and I-80  hauling produce out of the Rocky Mountains and West Coast east into the Midwest, and proteins and manufactured foods out of the Midwest back west. Kramer said that while he is focused on the assets’ operating ratio and free cash flow before revenue growth, he expects SOAR to grow its tractor count to 500 next year.

The consolidated freight brokerage operation will be run out of Chattanooga by David Ferguson, the president of Network. Prior to Network, Ferguson had a storied career in Chattanooga logistics which included serving as vice president of operations at U.S. Xpress, chief operating officer at Lipsey Logistics and president at Riverside Transport. Ben Gordon, the former chief operating officer at Network, will oversee the Chattanooga office as general manager. 

Poulos said that the future growth of SOAR and Network will likely be weighted toward the non-asset side of the business and that the Chattanooga brokers have the right culture to drive that growth.

“We’re leading with logistics, which opens us up to a world of service opportunities with our customers that are not limited to the asset,” Poulos said.

Isaacson said that there are few non-asset logistics providers who truly specialize in refrigerated freight. That opens up an opportunity for Network to go deeper with its customers and combine non-asset and asset services in novel ways.

Network’s strategy built around expertise in specific industry verticals

After the initial financial, human resources and technology integrations are completed over the next 30 to 60 days — Network’s technology team built bots to scrape all of its data and feed it into McLeod, the company’s new TMS — the management team will focus on organizational development. A major difference between Network’s plan for growth and most other freight brokerages is that it plans to organize its floor into pods based on seven industry verticals. The idea is that the brokers will gain expertise in the particular requirements of each kind of freight, whether it’s food and beverage or pharmaceuticals, and be able to add new customers in each vertical more efficiently.

“From a sales and marketing perspective,” Poulos said, “we’re going to develop those industry verticals that the asset side participates in — we’re heavy in food and beverage and nutraceuticals, a huge hauler of produce, frozen food, protein — we’re going to leverage that and build a brokerage skill set around that. We’re trying to build a better mousetrap by leveraging these assets and staying in our swim lane, with the goal of becoming the very best in the non-asset space with discipline in these industry verticals.”

Kramer said that Network would be solutions-oriented and creative, focusing on developing its people into best-in-class operators. He contrasted Network’s approach with other freight brokerages that churn through lightly trained young people, explaining that Network’s investments in its team, including tuition reimbursement, 401(k) plans and health benefits, would energize the company and attract high-quality employees.

We spoke about a secular trend toward increasingly strict shipper requirements. Over the past two decades, legions of supply chain management graduates have gone to work with shippers, optimizing their supply chain operations for cost and flexibility. In practice, that has often meant more burdensome requirements placed on transportation providers, especially in terms of visibility compliance, on-time and in-full expectations, and other service metrics. Those shipper requirements vary across industry verticals — pharmaceutical shipments for instance, can require higher levels of insurance and unique temperature-monitoring requirements.

“We view strict shipper requirements as a good thing,” Kramer said. “We have the technical capability and the expertise to execute; the harder the better, as far as I’m concerned.”

John Paul Hampstead

John Paul conducts research on multimodal freight markets and holds a Ph.D. in English literature from the University of Michigan. Prior to building a research team at FreightWaves, JP spent two years on the editorial side covering trucking markets, freight brokerage, and M&A.