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Forward woos $250M customer, retains at least 50% of business
Customer of 20 years sought to diversify operations
Forward’s stock price jumped around 19% on July 21 after the MOU was revealed, topping $15 after plummeting May 7-8 from above $18 to less than $10. (Forward Air Corp.)
Key Takeaways:
- Forward Air said July 21 it would retain at least 50% and potentially 75% of a longtime customer’s business.
- Losing the entire account would have cost Forward Air $250 million in annual revenue beginning in 2027.
- Forward Air expects two noncore asset sales to close soon and plans to report second-quarter earnings Aug. 5.
Forward Air will retain at least 50% of the business of a longtime customer that accounted for around 10% of the motor carrier and logistics business’ revenue, the company said July 21.
Greeneville, Tenn.-based Forward first disclosed the undisclosed customer of 20 years was in the process of diversifying its supplier pool when announcing first-quarter 2026 results May 7, tanking its stock price.
Had the customer taken all its business to one or more rival companies, Forward would have lost business accounting for $250 million of its 2025 revenue starting in 2027.
However, Forward said July 21 it entered a nonbinding memorandum of understanding that would see the company retain at least half of the customer’s business and potentially as much as 75% of the account. The July 20 MOU extended the contract between the parties for at least two years.
The carrier stressed in communications in May and July that it had achieved a high level of service excellence and exceeded most, if not all, of its key performance indicators on a regular basis and that the customer wanted to diversify its list of suppliers.
Forward’s stock price jumped around 19% on July 21 after the MOU was revealed, topping $15 after plummeting May 7-8 from above $18 to less than $10.
The company ranks No. 37 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 1 on the air/expedited carriers sector list. Forward/Omni ranks No. 33 on the TT Top 100 list of the largest logistics companies.
Asset sale percolates
More positive news for the stock price may be in the offing, too, with Forward’s sale of two of the smaller businesses acquired in the Omni Logistics deal scheduled to close.
Seen as noncore assets, Forward is in the process of selling the businesses plus its intermodal division after a strategic review that began in January 2025.
Forward Chief Financial Officer Jamie Pierson said during the company’s May 7 earnings call that the sale of the businesses was expected to close in 60 to 90 days. A Forward representative declined to comment July 21 on whether the timeline remained in place.
The legacy Omni businesses represent about $160 million in annual revenue, while the intermodal unit brings in about $230 million a year.
Susquehanna Investment Group analyst Harrison Bauer said in a May 8 research note that the Omni businesses were expected to raise around $110 million, while the intermodal unit would generate around $220 million in proceeds.
During the May call, Pierson said the sale of the intermodal division had only just kicked off and was expected to conclude by the end of the year.
Forward is selling the Omni businesses and intermodal division to delever its balance sheet and focus on its core operations, CEO Shawn Stewart added during the call.
A sale of the entire business or taking the company private — a possibility considered when the strategic review commenced — was scuttled by freight market weakness and the potential loss of its contract with the $250 million customer.
Forward reported a $40.2 million loss in the three months that ended March 31, compared with a $61.2 million loss in the year-ago period. It is scheduled to report second-quarter 2026 earnings Aug. 5.
