In what it calls a bid to “strengthen its omni-channel capabilities,” transportation conglomerate Ryder System, Inc. is buying e-commerce fulfillment provider MXD Group for $120 million, which includes MXD’s network of 109 facilities and last-mile operations. With this acquisition, Ryder said it is now the second largest last mile delivery provider of big and bulky goods in the U.S.
The deal adds 109 MXD e-commerce fulfillment centers located across the U.S. and Canada to Ryder’s service network, including 21 MXD-operated cross dock hubs, 16 dedicated operations, and a network of 72 third-party agent facilities.
That expands Ryder’s e-commerce network to 121 “hubs” in total covering more than 95% of the U.S. and Canada within a two-day delivery timeframe. Ryder noted it can serve “any industry” through this e-commerce network, shipping everything from “big and bulky products” to “small and large parcels.”
The acquisition also includes proprietary order management and visibility technology, said Ryder, which features real-time tracking and a customer service portal for rapid response and resolution.
“This acquisition of MXD will enable many of the businesses we serve to better meet their customers’ demands, which are constantly and rapidly changing amid a heightened e-commerce era,” noted Robert Sanchez, Ryder’s chairman and CEO, in a statement. “[It] is one of several strategic investments we are making to overcome the disruptions we are seeing in the market today.”
Ryder added that it expects the deal to be “nominally accretive” to earnings in 2018, with the anticipation for “earnings growth in future years” to come from introducing more last-mile and e-commerce services to its extensive current customer base, while leveraging its sales and marketing capabilities to attract new customers
“This acquisition provides [us] the opportunity to tap into an established network in the U.S. and Canada serving manufacturers, retailers, and their customers, who have come to expect rapid deliveries,” explained Steve Sensing, Ryder’s president of global supply chain solutions. “E-fulfillment has become more critical to our customers than ever before, and with this new, expanded footprint, we’ll be better positioned to lead the charge in delivering a complete turnkey solution that not only includes warehousing, distribution, and transportation management, but also home delivery and white glove installation.”
E-commerce activity is expanding rapidly, the U.S. Commerce Department noted in recent report, which said consumers spent $453.46 billion via the web for retail purchases in 2017 – a 16% increase compared with $390.99 billion in 2016. That’s the highest growth rate since 2011, when online sales grew 17.5% over 2010, the agency noted. In terms of overall retail sales, e-commerce represented 13% of total retail sales in 2017, which is a “marked increase” from 11.6% in 2016, Commerce noted.