Within weeks of closing a deal to increase its footprint in Ohio, Schneider National announced a purge of all Canadian-based operations.
“This decision was difficult. The change will affect all 150 Canadian-based associates and drivers. We are working with associates during the transition,” the company reportedly stated. “Company trucks and equipment will transfer to our U.S.-based network to continue to serve our customers and as we proceed with the sale of the Guelph, Ontario, property. We expect Schneider will no longer have Canadian-based operations by the end of March.”
Known for its signature orange tractor-trailers, the freight hauler reportedly plans to transfer the physical assets to its Green Bay, Wisconsin, base. The news comes on the heels of a U.S.-based acquisition that doubles down on Schneider’s Midwest capabilities. Schneider closed a deal on Dec. 31 that gives the outfit 100 percent equity in Ohio-based Midwest Logistics Systems (MLS). The move increases its ranks by upwards of 1,000 drivers and 900 rigs across 30 Midwestern facilities. Schneider anticipates employing a loose hand over MLS, with it operating as a relatively independent subsidiary.
“Preserving the MLS identity is essential. The carrier’s family-owned nature combined with its strong culture and customer service make it a valuable contributor for growing Schneider’s dedicated operations,” Schneider President and CEO Mark Rourke reportedly stated. “With this acquisition, we believe Schneider is on track to generate $1 billion in annual revenue in our dedicated operations with over 5,000 trucks.”
Schneider reportedly spent $263 million to acquire MLS, which posted annual revenue of approximately $205 million. MLS revenue is expected to immediately buoy Schneider per-share earnings for the first quarter of 2022. The transportation and logistics operation has been busy diversifying its operations in the central region of the country. It recently brokered a deal with the Union Pacific to be its designated intermodal carrier.
“Schneider’s intermodal business is a great fit for Union Pacific’s diverse network,” Union Pacific CEO Lance Fritz reported stated. “We look forward to growing in the intermodal space together.”
Starting in January, 2023, Schneider plans to pivot away from dependence on CSX and BNSF Railway. Competitors such as J.B. Hunt see the changing landscape as a growth opportunity.
“We are aware of another channel that certainly left BNSF and went to Union Pacific, and certainly, that presents an opportunity, I mean, those lifts were occurring on BNSF, we are aligned with BNSF in a growth strategy, we have discussions with BNSF daily about our efforts to grow together, and we have a lot of focus in that area in 2022,” J.B. Hunt intermodal division chief Darren Field reportedly said.
Schneider National reportedly posted nearly $4.6 billion in annual revenue and was founded in 1935. The organization employs more than 6,000 truck drivers and works with 2,800 owner-operators.
Sources: freightwaves.com, marketwatch.com
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