A private equity company announced today that it has acquired and integrated two logistics firms that will combine nationwide vendor consolidation, brokerage and “volume” less-than-truckload (LTL) capabilities to offer services that traditional LTL carriers often shy away from.
New York-based Hudson Hill Capital said it acquired majority stakes in Glen Rock, New Jersey-based Global Transport Logistics, Inc. (GTL) and Addison, Illinois-based Am Trans Expedite, Inc. (Am Trans) to form Fusion Transport, LLC. The new company will be headquartered in Glen Rock, a New York City suburb and GTL’s current home base. It will be run by Frank Matarazzo, GTL’s CEO. Am Trans Co-Founder Mike Wallace has been appointed Fusion’s president of logistics, while Bob Trusz, Am Trans’ other co-founder, was named president of asset services. The acquired companies will operate as subsidiaries of Fusion.
Hudson Hill was founded by Josh Rosen, who in his current role is making his first foray into transportation and logistics. Terms of the transaction were not disclosed.
The combination marries GTLs vendor consolidation expertise with Am Trans’ brokerage and asset-based network. Am Trans operates 60 to 70 power units and 350 trailers, while GTL has 10 power units and 150 trailers. There will be no contractual commitments made for the capacity, Matarazzo said in a June 20 interview. Instead, equipment will be made available on as-needed basis in lanes with enough density to justify the utilization, he said.
It also gives GTL vendor consolidation footprints in the Midwest and in northern California, markets where the company knows there is strong demand but where it has been unable to build the capacity to meet it. It will also expand GTL’s relatively small presence in the Dallas market. Am Trans’ brokerage network will support the vendor consolidation program by finding capacity for overflow loads and managing transport services for Fusion’s clients. The vendor consolidation and brokerage services will work in tandem to support the supplier-retailer ecosystem, and will not be sold as stand-alone services, Matarazzo said.
In a vendor consolidation program, LTL shipments from multiple vendors are consolidated into a volume LTL move and shipped, typically weekly, to retailers’ distribution centers. Volume LTL, which is also known as “partial truckload,” covers shipments generally too large for traditional LTL carriers to accept but that aren’t large enough to fill a truckload trailer with one shipper’s freight. Volume LTL shipments usually range from eight to 18 pallets, weigh between 8,000 and 27,500 pounds, and occupy more than 12 feet of linear space in a trailer.
The hub-and-spoke networks of pure-play LTL carriers are not configured to cost-effectively handle the larger retail consignments that are best shipped in point-to-point moves. Pure-play LTL carriers generally focus on shipments of 1 to 3 pallets which cube out at about 750 cubic feet.
The volume LTL concept, which has been around for a long time, gained traction a couple of years ago as an outlet for shippers, brokers and third-party logistics (3PL) providers that sought truckload capacity but found it hard to come by in an ultra-tight market.
The vendor consolidation model works well in retail because retailers generally give suppliers long lead times from the time an order is received to when the goods must reach a warehouse or distribution center, Matarazzo said. This gives the supply chain significant time to build optimal load planning strategies, he said. By contrast, industrial freight is associated with more urgent moves, such as the need to replenish stock at a chemical plant or to get a piece of machinery to a factory.
Michael Evans
This may turn out to be a positive move for everyone. If traditional LTL companies choose to bypass these services, then it is good that someone is out there who will take the job. http://www.Loadpower.com