News / Echo Global profits hit, but cost of Command integration will bring payback, says CEO

Echo Global Logistics may have recorded record revenues in 2016, but the $11.4m cost of integrating acquisition Command Transportation hit the bottom line.

Net income fell 79.7% year-on-year from $7.8m to $1.6m.

The company completed its acquisition of Command in June 2015, which was fully integrated in October.

Chief executive Douglas Waggoner said 2016 had been a hectic year for the company, but the integration had brought significant benefits to future operations.

“We have greatly enhanced our truckload technology platform, invested in our technology infrastructure and facilities to handle significant future growth and organised our teams in the best way to bring continued high levels of service to both shippers and carriers,” he said.

“Our employees are adapting well to the new system and the changes to our operating procedures, all while continuing to satisfy our clients and carriers. But at the same time, our sales and operations people have lost some productivity.”

Mr Waggoner said he believed this would be a short-term setback; a natural outcome of bringing the two companies together.

“The loss of productivity results in less time selling and more time focusing on processes and delivering services for existing customers, and less opportunity to drive new business,” he continued.

“Fortunately, momentum is building and our people are gaining proficiency with our new systems, and we are confident that we will continue to see productivity gains resulting in market share gains as we progress into 2017.”

While net income dived, volumes and gross revenues stayed firm and, in some cases, saw sizeable growth, with truckload volumes up 30.5% year-on-year and less-than-truckload (LTL) volumes up 3.1%.

Overall revenue for the year jumped 13.5% to $1.7bn, though much of this was hacked back by a 14.4% upswing in transportation costs, which stung the company to the tune of $1.39bn.

You can read the full results here.