News / Knight-Swift scoops up more Yellow terminals in its quest for LTL reach

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Knight-Swift Transportation took another stride on its road to a US-wide LTL network as it scooped up ten more terminals of defunct Yellow Freight.

The seventh-largest US trucking outfit acquired 13 facilities and leases for two more in the first round of the sell-off of Yellow’s assets.

One of the largest truckload operators on the North America scene, Knight-Swift pushed into the LTL market in 2021 with the takeover of AAA Cooper Transportation, followed by the acquisitions of Midwest Motor Express and Midnite Express.

Management has made no secret of its ambitions to establish a nationwide network. CEO and president Dave Jackson said on an earnings call in late January the target was to have the full network in place by the end of next year.

He added that this should be partly achieved through organic expansion, but chiefly via more acquisitions.

Satish Jindel, president of SJ Consulting, said Knight-Swift had the necessary resources and management had done its homework to attain its objective. But the expansion would not be without challenges, he added.

“Covering the mid-Atlantic and north-east regions is going to be more challenging, and California is a very challenging state,” he said, pointing to the high cost of real estate and a highly regulated environment.

So far, Knight-Swift’s LTL footprint is largely in the south-east and Midwest. Since it began its foray into the LTL scene it has opened 14 facilities, boosting its footprint from the acquisitions to altogether 115 locations by the end of January.

Mr Jackson told financial analysts that the plan is to open 20 new sites this year. In addition to these another ten terminals could be brought on board, probably through leases.

The biggest hurdle for new entrants into the LTL market is the need for a network of terminals, Mr Jindel noted. The collapse of Yellow, which brought a lot of facilities on the market, has been a massive help for Knight-Swift’s plans, he said.

In the first auction of Yellow facilities, Knight-Swift spent $51.3m on 13 sites Yellow had owned outright, plus $417,150 for two leased buildings. The second round yielded ten more leased facilities for $2.2m.

It would be no surprise if Knight-Swift were to take a third bite. There are still 46 facilities that Yellow owned, plus another 108 on leases.

Mr Jindel said: “The challenge for them, now that they’ve got the terminals, is getting the technology – especially the dimensioning machines for getting the right prices – and finding good management people.”

On the earnings call, Mr Jackson was upbeat on the LTL market, whereas he described the outlook for the truckload market as soft, and sees little promise in the near future.

Mr Jindel agreed: “For this and next year LTL is in a better position than the other two segments of the trucking market [truckload and parcel].”