National LTL carrier Saia is buying regional LTL carrier Madison Freight Systems (MFS) for $2.5 million in an effort to beef up its coverage of Wisconsin, Illinois, and Minnesota. Saia expects the integration of MFS into its operations should cost $900,000 and be wrapped up by March.
Founded in 1943 and based in Waunakee, WI, MFS employs 200, operates five freight terminals, and should add $15 million in revenue to Saia’s bottom line, said Rick O’Dell, Saia’s president & CEO.
“This acquisition advances Saia toward our strategic goal of increased density in our existing geography and providing full-state coverage,” he added. “It will leverage our existing operations in the area including the recent addition of our second terminal in Chicago.”
Overall LTL tonnage for Saia grew 9% in 2006, with yield rising 6% despite a general slowdown in freight volumes.
“In light of recent economic conditions and more difficult comparisons, I am pleased with our success,” said O’Dell. “We improved our operating ratio…even though our cost performance was challenged by the weaker than expected volumes, as well as unfavorable trends in workers’ compensation and health care expenses.”
