Stifel: XPO gets managed transportation muscle with NLM

   XPO Logistics’ purchase last week of the managed transportation solutions subsidiary of fellow truck brokerage Landstar provides it with a more “defensible vertical,” according to the Transportation & Logistics Research Group of the investment bank Stifel.
   XPO said last week it will pay Landstar $87 million for NLM, which predominantly serves auto (original equipment manufacturers and tier-I suppliers) customers, as well as those in consumer electronics, retail and construction
   “(XPO) continues to diversify away from its core truck-brokerage business — last mile delivery was, of course, the last major addition to XPO’s service profile,” Stifel wrote in a note Monday. “Managed transportation is more sticky (longer-term contracts, harder to move to another provider), and NLM is highly customized for each customer. We believe the supply chain/TMS business (as well as the recently acquired last-mile delivery businesses) is more defensible over the long term for XPO Logistics.”
   Meanwhile, Stifel said that Landstar was willing to divest itself of NLM because the business the logistics solutions/transportation management offering “weren’t well suited for integration into an agent-based model such as Landstar’s,” according to Landstar executives.
   The moves, Landstar said on a conference call last week, will re-double its efforts on growing its core agent-based business.
   The acquisition of NLM was XPO’s 10th in the last two years.