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CRST International on March 2 announced it had acquired final-mile specialist NAL Group. Financial terms of the agreement were not made public.
NAL Group is headquartered in Edison, N.J., and most of the company’s business is in warehousing services and final-mile delivery of big and bulky consumer durables, complex in-home installation and assembly services and express courier services.
Hugh Ekberg, CEO of Cedar Rapids, Iowa-based CRST, told Transport Topics his company is successful in the final-mile area but saw this as an opportunity to expand.
“We were introduced to NAL Group last summer,” he said. “They’ve got what we consider a better mousetrap, and these people created a business, and they’ve experienced very impressive growth.”
CRST was founded in 1955, hauling livestock from farms in Iowa to the Chicago Stockyards. But instead of returning with empty trucks, the company’s leadership persuaded steel companies to haul steel to parts of the Midwest on the return trips. The company still is family-owned with annual revenue of $1.5 billion and, according to the Federal Motor Carrier Safety Administration, operates more than 4,000 power units.
NAL Group also is privately held.
According to the U.S. Commerce Department, e-commerce is rapidly expanding. Growth reached nearly $602 billion in sales in 2019, an increase of 14.9% from 2018. Consumers are becoming more comfortable with shopping online, especially for larger items such as furniture and durable goods, such as refrigerators, washers and dryers. E-commerce in 2019 accounted for 11% of all sales, compared with 9.9% in 2018.
Ekberg said that was one of the main reasons why CRST acquired NAL.
“We know that home delivery of large items and the installation of items in the home, we don’t see that market slowing down,” Ekberg said. “We see the consumer more and more liking a very smooth delivery and installation, and we feel very well-positioned now that we have added NAL Group to our capabilities.”
Ekberg says it is likely that in the future, as NAL continues to grow, it will become the largest business unit within CRST.
“We think this can be one of our strongest growth drivers for CRST,” Ekberg said. “This will integrate well with our specialized business. It’s a service model that many of our top customers, that we do longhaul freight, or do flatbed freight, or do logistics for. This is a service model they want.”
CRST said as part of the purchase agreement, NAL’s leadership, including CEO Matt Riordan, will remain with the organization overseeing sales and operations.
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“The NAL Group team looks forward to joining the growing CRST International organization. With NAL Group’s strong reputation and specialized service offerings, we are excited to offer our collective customers a wider range of services in more locations,” Riordan said.
Ekberg said NAL potentially could be responsible for as much as 10% of the company’s annual revenue.
“The team that leads the business now is very capable,” he said. “It was a requirement for us to keep them on board. Because they bring a lot of the know-how and expertise to grow this, and once they got to know us, they got very excited about the potential for them. We’re very happy to have them stick with us, and our intention is to have them stick with us for a long time.”
CRST International ranks No. 24 on the Transport Topics Top 100 list of the largest for-hire carriers in North America.
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