In an effort to strengthen its position in the growing final-mile trucking sector, J.B. Hunt on Jan. 8 announced it is purchasing Cory 1st Choice Home Delivery for $100 million.
“This is a strategic investment that will further advance our final-mile delivery capabilities of ‘big and bulky’ products to consumers and expand our expertise in furniture delivery,” J.B. Hunt CEO John Roberts said in a statement.
Powered by the rising popularity of e-commerce, final-mile delivery is a key area of growth potential for the trucking industry, surging 16% in 2018, according to research firm DAT.
“It strategically makes all the sense in the world,” said Donald Broughton, principal managing partner of Broughton Capital, in an interview with Transport Topics. Broughton said “big and bulky” packages are much different than parcels typically associated with deliveries by UPS and FedEx, and this purchase will benefit J.B. Hunt as it competes head-to-head with companies such as XPO Logistics and others moving aggressively into the sector.
“There is a need for a ‘final-mile guy’ to show up, make an appointment at your house to — politely and without leaving anything behind — put the big screen TV exactly where you want it on the wall, hooking it up and making sure it is working exactly the way you want it, or setting up the above-ground swimming pool, because they (big and bulky items) do not assemble themselves,” he said.
In fact, J.B. Hunt’s purchase of the Secaucus, N.J.-based company comes at a time when consumers are becoming more comfortable buying larger items such as furniture, appliances and exercise equipment online.
A report from OneClickRetail.com showed that online furniture sales are one of the fastest-growing sectors of the e-commerce business and were projected to increase by at least 18% in 2018 to more than $50 billion. Amazon’s furniture sales jumped by 51% year-over-year in 2017.
“Cory’s exceptional reputation for quality customer service complements our mission to be the best final-mile provider in North America,” said Nick Hobbs, J.B. Hunt president of Dedicated Contract Services.
Cory 1st Choice was founded in 1934. The company said it annually completes an estimated 2 million deliveries through more than 1,000 carriers, contractors and drivers operating out of 14 warehouses and other facilities.
This latest acquisition follows J.B. Hunt’s 2017 purchase of another last-mile delivery company, Special Logistics Dedicated, for $136 million.
J.B. Hunt, which set up its final-mile business in 2008, said revenue will exceed $350 million in 2018.
For the third quarter of 2018, J.B. Hunt reported a big bump in revenue as higher rates boosted top-line results for each of its four freight segments. Profits, however, did not keep pace as the company dealt with outstanding legal issues and absorbed startup costs for several large dedicated hauling contracts.
Net income rose 6% to $131.1 million, or $1.19 a share, in the three months ended Sept. 30 compared with $100.4 million, or 91 cents, in the year-ago period. Revenue soared 20% to $2.21 billion compared with $1.83 billion in 2017.
J.B. Hunt DCS ranks No. 1 on the Transport Topics list of largest dedicated contract carriers in North America with 8,727 power units.
Overall, J.B. Hunt operates a fleet of more than 15,600 tractors and 734 straight trucks, according to registration data on file with the U.S. Department of Transportation.
Lowell, Ark.-based J.B. Hunt Transport Services ranks No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 6 on the Transport Topics Top 50 list of largest logistics companies in North America.
Staff Writer Daniel P. Bearth contributed to this story.