UPS to purchase TNT Express

March 19, 2012
Combination won’t dramatically affect U.S. trucking operations

United Parcel Service’s $6.77 billion all-cash plan to buy out Europe-based rival TNT Express N.V. won’t alter the U.S. trucking landscape much at all, according to experts. Rather, the impact of this deal will be most keenly be felt in the global air freight markets and in Europe.

“Any impact in the states is likely to be concentrated in the air market since it would be going international,” Jonathan Starks, director of transportation analysis for FTR Associates, told Fleet Owner.

Starks noted that the parcel market is relatively small from a “big picture” perspective, representing just under 5% of the total U.S. trucking market by loadings, according to FTR’s data. “So, overall, [there’s] not much of an impact in the U.S. truck market,” he said.

By contrast, however, the deal will make UPS a much larger air freight player and significantly beef up is transportation presence in Europe. UPS said the post-transaction amalgam of itself and TNT should result in a company generating $60 billion annually in revenue and that a key feature of the deal is the integration of TNT Express’ intra-Europe road freight network into UPS’ logistics operations on the continent.

“With this combination, both UPS and TNT Express will significantly enhance their ability to serve our combined customers’ complex global logistics needs,” noted Scott Davis, chairman & CEO of UPS in a statement.

“The additional capabilities and broadened global footprint [from the TNT acquisition] will support the growth and globalization of our customers’ businesses,” he added, “At the same time, this positions us for future growth, which will benefit our employees and shareowners.”

Davis pointed out that following the transaction, around 36% of the combined group’s revenues will be generated outside the U.S., up from 26% today at UPS.

About the Author

Sean Kilcarr | Editor in Chief

Sean previously reported and commented on trends affecting the many different strata of the trucking industry. Also be sure to visit Sean's blog Trucks at Work where he offers analysis on a variety of different topics inside the trucking industry.

Voice your opinion!

To join the conversation, and become an exclusive member of FleetOwner, create an account today!

Sponsored Recommendations

Leveraging telematics to get the most from insurance

Fleet owners are quickly adopting telematics as part of their risk mitigation strategy. Here’s why.

Reliable EV Charging Solution for Last-Mile Delivery Fleets

Selecting the right EV charging infrastructure and the right partner to best solve your needs are critical. Learn which solution PepsiCo is choosing to power their fleet and help...

Overcoming Common Roadblocks Associated with Fleet Electrification at Scale

Fleets in the United States, are increasingly transitioning from internal combustion engine vehicles to electric vehicles. While this shift presents challenges, there are strategies...

Report: The 2024 State of Heavy-Duty Repair

From capitalizing on the latest revenue trends to implementing strategic financial planning—this report serves as a roadmap for navigating the challenges and opportunities of ...