INDIANAPOLIS — Celadon Group said Monday that it had disposed of substantially all of the assets used in its Logistics business division in an all cash transaction.
The carrier said the move was a continuation of its strategic plan to streamline operations, reduce total debt and focus on its core trucking business by completing the sale of logistics Monday with an effective financial transfer date of April 1, 2019.
The purchaser was TA Services, a PS Logistics, LLC. PS Logistics is said to be a rapidly growing full-service provider of asset-based transportation, brokerage, 3PL, and supply chain services.
The Celadon Logistics Division, which provides a full spectrum of freight brokerage, transportation management and warehousing solutions, contributed approximately $139 million in revenue to the company in the fiscal year ended June 30, 2018. The proceeds were used to pay transaction expenses, to reduce borrowings under the Company’s revolving credit agreement, and to provide additional liquidity.
Paul Svindland, Celadon chief executive officer, said the transaction will include an ongoing strategic relationship under which Celadon will have access to the logistics platform to continue to serve customers’ needs on a revenue sharing basis as well as a commitment for the Company not to conduct independent brokerage operations.
The transition of customer relationships, IT and other activities will be ongoing.
Jon Russell, Celadon’s president chief operating officer and former president of Logistics, will remain a member of the company’s senior management team, while serving as a consultant to TA Services through the transition process.
Post-transition, Russell is expected to become part of TA Services management team.
“The sale of Logistics marks another important milestone in executing our strategic plan to simplify our business and reduce debt,” Svindland said. “Over the past several quarters, we have divested the former Quality business, the joint venture with Element, our flatbed business, our West Coast dedicated business, A&S/Buckler and now Logistics. Giving effect to these dispositions, the go-forward Celadon has returned to its roots as an asset-based truckload carrier serving the North American market, with particular focus on the eastern half of the United States and cross border traffic with Mexico and Canada. On a pro forma basis, we remain one of the largest industry competitors, with key locations in approximately a dozen states and provinces and a consolidated annual revenue run rate of approximately $550 million.
“From a leverage perspective, this transaction and our recent sale of our A&S Kinard and Buckler subsidiaries have reduced our outstanding borrowings and capital leases by approximately $185 million. We continue to work with existing and new financing sources toward both an extension of our current facility and a longer-term capital structure that will support our ongoing operational and financial improvement efforts.”
Svindland said he expected that TA Services’ significant existing footprint and resources, combined with Russell’s expertise, would provide an excellent platform for Logistics’ continued growth and dedication to excellent customer service.
“We look forward to the ongoing strategic alignment between our companies and are confident in delivering continued value to our customers as well as an excellent new home for the Logistics employees.”
Barr-Nunn creates new solo fleets, increased pay
GRANGER, Iowa — Barr-Nunn Transportation has created new solo fleets and increased pay.
For drivers living in the northeastern United States, Ohio and some of Indiana and Kentucky there are now two options for home time.
Drivers can be home every weekend for two days and earn a maximum starting pay of 60 cents per practical mile or drivers can be home every other weekend for three days and earn a maximum starting pay of 61 cents per practical mile.
Barr-Nunn Transportation also offers an over-the road North fleet for those drivers living in West Virginia, Detroit, along with parts of Indiana, Wisconsin, and Iowa. These drivers are home every 18 days for four full days and can earn a top starting rate of 62 cents per practical mile to start.
In addition to these starting rates all company drivers receive CSA safety bonuses of $725 or $550 every 90 days plus PTO (vacation) along with the money. Over-the-road company drivers can earn over two weeks of PTO (vacation) in their first year with Barr-Nunn and they start receiving this PTO after 30 days.
Blue Cross Blue Shield Insurance, 401(k) matching program, extra pay per mile on shorter hauls and paid life insurance are added benefits at Barr-Nunn.
For more information about Barr-Nunn Transportation visit their website at www.barrnunntruckingjobs.com or call 888-999-7576.
FTR’s Shippers Conditions Index took step back in April
BLOOMINGTON, Ind. — FTR’s April Shippers Conditions Index (SCI) took a step back in April to a reading of 1.9, close to a full point below March.
The April SCI measure was negatively affected by stronger rail rates and higher fuel prices outweighing improved shipper conditions related to trucking.
The outlook shows strong shipper conditions through 2019 as the rate environment is expected to become more favorable. Key factors to watch include fuel prices, truck utilization, and rail service.
“Shippers should continue to expect favorable conditions and an ability to easily get freight placed in the market,” said Todd Tranausky, vice president of rail and intermodal at FTR. “They will be aided by the relatively stable fuel prices through most of the rest of 2019 and somewhat slowing rail freight volumes.”
The Shippers Conditions Index tracks the changes representing four major conditions in the U.S. full-load freight market. These conditions are: freight demand, freight rates, fleet capacity, and fuel price. The individual metrics are combined into a single index that tracks the market conditions that influence the shippers’ freight transport environment. A positive score represents good, optimistic conditions. A negative score represents bad, pessimistic conditions. The index tells you the industry’s health at a glance. In life, running a fever is an indication of a health problem. It may not tell you exactly what’s wrong, but it alerts you to look deeper. Similarly, a reading well below zero on the FTR Trucking Conditions Index warns you of a problem…and readings high above zero spell opportunity. Readings near zero are consistent with a neutral operating environment. Double digit readings (both up or down) are warning signs for significant operating changes.
For more information about the work of FTR, visit www.FTRintel.com, follow us on Twitter @ftrintel, or call (888) 988-1699, ext. 1.
ACT Research Trucking Index shows nearly across-the-board declines
COLUMBUS, Ind. — The latest release of ACT’s For-Hire Trucking Index showed nearly across-the-board declines, with capacity being the lone exception.
The Pricing Index fell considerably to 38.8, in May on a seasonally adjusted (SA) basis, the lowest in survey history, from 45.4 in April.
The Volume Index dropped further into negative territory hitting 46.7 (SA), from 49.5 in April. Fleet productivity/utilization slipped to 46.0 in May on a seasonally adjusted basis down from 49.4 in April, and capacity growth increased to 54.6, from April’s 54.3 reading.
“May’s Pricing Index was the fourth consecutive negative number after 30 straight months of expansion. This confirms our expectation that the annual bid season is not going well for truckers,” said Tim Denoyer, ACT Research’s vice president and senior analyst. “We continue to believe rates are under pressure from weak freight volumes and strong capacity growth.”
Volume in May fell for the sixth time in the past seven months, Denover said.
“The softness coincides with several other recent freight metrics, with the drop likely due in part to rapid growth of private fleets and the slowdown in the industrial sector of the economy,” he said. “The supply-demand balance reading loosened to 42.1, from 45.3 in April. The past seven consecutive readings have shown a deterioration in the supply-demand balance, with May the largest yet.”
The ACT Freight Forecast provides quarterly forecasts for the direction of volumes and contract rates through 2020 and annual forecasts through 2021 for the truckload, less-than-truckload and intermodal segments of the transportation industry.
For the truckload spot market, the report provides forecasts for the next 12 months.
ACT is a publisher of new and used commercial vehicle (CV) industry data, market analysis and forecasting services for the North American market, as well as the U.S. tractor-trailer market and the China CV market. ACT’s CV services are used by all major North American truck and trailer manufacturers and their suppliers, major trucking and logistics firms, as well as the banking and investment community in North America, Europe, and China.
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