Transplace Inc. has acquired the intermodal and freight brokerage business in North America of Yusen Logistics (Americas).
The move gives Frisco, Texas-based Transplace a significantly larger slice of the domestic intermodal business but also represents a rare pull-back from the North American market by one of the world’s largest providers of global shipping and supply chain services.
Terms of the transaction were not disclosed.
Yusen Logistics (Americas) is a subsidiary of Tokyo-based Nippon Yusen Kaisha and ranks No. 15 on the Transport Topics list of the largest freight brokerage firms in North America with estimated net revenue of $90 million and gross revenue of $725 million in 2017.
Transplace ranks No. 46 on the TT list of largest logistics companies in North America with net revenue of $242 million and gross revenue of $2.18 billion. The company ranks No. 17 on the list of largest firms in the freight brokerage sector.
In an interview, Transplace CEO Frank McGuigan told TT that the acquisition represents a “significant increase” in revenue for Celtic Intermodal, the company’s intermodal business unit, while providing access to new customers and traffic lanes.
“Our customers will benefit from the network synergy with Transplace’s current intermodal and over-the-road footprint resulting in opportunities for more effective execution of their intermodal shipments as well as mode conversion,” McGuigan said.
Transplace will retain nearly all of the 125 employees working in Yusen’s brokerage business and will maintain Yusen’s intermodal operations in Jacksonville, Fla., Cincinnati, Ohio, Memphis, Tenn., Chicago and Dallas.
Logistics industry researcher Evan Armstrong said he thinks the decision by Yusen to sell its intermodal and freight brokerage operations in North America reflects a desire to focus on faster-growing Asian trade lanes.
Yusen Logistics entered the domestic logistics market with the acquisition of GST Corp. by Yusen’s parent NYK Group in 1989, Armstrong said.
“Over the years, the intermodal and freight brokerage operation has grown, but not to the extent of many other competitors, such as C.H. Robinson Worldwide, Hub Group or more recent entrants such as Coyote Logistics or Total Quality Logistics,” Armstrong said. “In my opinion, the domestic transportation management operations were never leveraged to [their] fullest extent by Yusen Logistics, who is much more focused on international air and ocean [shipping].”
Yusen Logistics, in fact, remains a major warehouse operator in North America with 3.1 million square feet of space in 49 facilities, based on data provided to TT for its 2018 Top 50 Logistics Companies list. In December 2017, the company added a second warehouse in Laredo, Texas, to handle growing demand for cross-border services between the United States and Mexico.
Overall, Yusen Logistics operates in more than 550 locations in 44 countries and ranks No. 3 on the TT list of top airfreight forwarders and No. 7 on the list of largest ocean freight forwarders.
Representatives of Yusen Logistics did not respond to a request for comment about the Transplace transaction.
Transplace is a portfolio company of TPG Capital and the deal with Yusen Logistics represents the eighth acquisition by the company in the past eight years.