Major Developments in the LTL Carrier Landscape: Saia and the Sale of Yellow Corp. Terminals
In a significant turn of events, it has recently come to light that another batch of terminals from the now-defunct less-than-truckload (LTL) carrier, Yellow Corp., is set to be sold off. As outlined in a filing with the federal bankruptcy court in Delaware, a motion was submitted on Monday seeking approval for the sale of ten locations, collectively valued at approximately $20.7 million.
Saia’s Strategic Acquisition
Leading the charge in acquiring these terminals is Saia (NASDAQ: SAIA), which is set to purchase three leased properties for a total of $6.5 million. The properties in question comprise a 72-door terminal in Orlando, Florida; a 54-door terminal in Deer Park, New York; and a 21-door terminal in Calexico, California. With this latest acquisition, Saia will have secured 31 terminals from Yellow’s estate for an estimated total of $250 million.
It’s worth noting that last year, Saia aggressively expanded its operations, opening 21 of the 28 locations acquired during the initial two auctions of Yellow’s real estate assets. This expansion strategy, alongside a plan to relocate other terminals to more advantageous locations in the coming year, has solidified Saia’s status as a robust national carrier, serving all 48 contiguous states.
Challenges Amid Expansion
Despite its growth trajectory, Saia recently faced challenges in the first quarter of the year, notably failing to meet market expectations. The costs associated with onboarding these new sites and scaling operations at an industry-leading rate took a toll on its financial performance, leading to a 30% drop in its share prices. As the company navigates these challenges, investors and stakeholders should keep a close eye on how effectively Saia can integrate these new locations and manage operational costs.
New Players Entering the Market
Interestingly, several new buyers are entering the fray, acquiring terminals previously operated by Yellow. For instance, Moon Star Express, a Michigan-based fleet with 300 trucks and 600 trailers primarily serving the auto industry, is set to purchase an 80-door terminal valued at $10 million in Pontiac, Michigan, through its affiliate, M Way Holding. This move indicates an expansion of services into the LTL sector by companies traditionally focused on different markets.
Additionally, Borg Enterprises, associated with Northland Towing, is moving forward with plans to acquire a 27-door terminal in Fargo, North Dakota, for $1.6 million. In a related acquisition, specialty foods company Baldor is purchasing an 18-door terminal near Portland, Maine, valued at $1.55 million.
United Holding Group, under Aman Truck Lines, is also diving into the action with a deal for 46 doors in Atlanta, Illinois, priced at $450,000. Importantly, this group had previously participated in Yellow’s first auction, indicating a sustained interest in expanding its footprint in the LTL market.
The Broader Picture
Various real estate investment firms have also jumped on the opportunity to acquire Yellow’s assets. Their acquisitions range from a 28-door location in Hubbard, Ohio, for $140,000 to a 3.5-acre site in Goodland, Kansas, sold for a mere $25,000. Since the liquidation process began at the end of 2023, Yellow’s estate has offloaded over 200 terminals valued at around $2.4 billion, further reshaping the competitive landscape in the logistics and transportation sectors.
As the dust settles from Yellow Corp.’s liquidation and various players transition into these newly available spaces, it will be enlightening to observe how these acquisitions impact operational efficiencies, freight pricing, and service offerings in the LTL transportation market.
Stay tuned for more updates and insights as we continue to monitor the evolving landscape of the logistics sector.