UPS Freight, which generated an estimated $ 3 billion in revenue last year, is one of the largest less-than-truckload carriers in the US.
January 26, 2021 / 08:35 PM IST
Representative image (PC-AFP)
UPS has reached an agreement to sell the Virginia-based UPS Freight to Canadian trucking giant TFI International for $ 800 million.
Both companies announced their agreement in a statement Monday, saying the deal is expected to close in the second quarter of 2021 pending regulatory approvals.
Approximately 90% of the acquired business will operate under a new name TForce Freight, which will continue to serve UPS less-than-truckload operations, according to Montreal-based TFI. The company says the remaining assets will join TFI’s truckload business segment.
Budget 2021 expectations | Transporters’ profitability hinges on reduction in excise duty on diesel
UPS Freight, which generated an estimated $ 3 billion in revenue last year, is one of the largest less-than-truckload carriers in the U.S. Those operators typically use trucks for bulk shipments.
TFI CEO Alain Bdard called the agreement a highly strategic transaction that will make the company one of the largest North American less-than-truckload carriers.
Bdard had said during a conference call with investors on Monday that UPS’ freight unit was like a loss leader for UPS,” and promised to change the business approach, The Atlanta Journal-Constitution reported. Meanwhile, UPS Chief Executive Officer Carol Tom said the agreement will allow UPS to be even more laser-focused on the core parts of our business that drive the greatest value for our customers.
The companies also will enter into an agreement that will allow the trucks to continue to use UPS domestic package network to fulfill shipments for a period of five years.
All of UPS Freights 14,500 workers will become employees of TFI when the deal is finalized, The Richmond Times-Dispatch reported. About 80% of them are full-time workers.