For Knight-Swift Transportation Holdings, M&A involves scaling businesses alongside growing successes in the workforce, Treasurer and SVP of Investor Relations Brad Stewart told Trucking Dive last month.
The company’s acquisition this year of LTL carrier Dependable Highway Express established a key link in developing a national in-house network, thanks to 11 terminals in California and other assets.
But the deal is just one step in growth that relies on finding success year over year for businesses and drivers, Stewart said in an Oct. 25 interview.
“We want the people that are a part of the existing success of the business to be a part of the ongoing success and taking that to new levels,” he said. “The natural inertia that comes with that can’t be replicated.”
Creating a national LTL network
With the DHE deal, along with the acquisitions of AAA Cooper Transportation and Midwest Motor Express in 2021, the traditionally TL giant now operates 165 LTL facilities across 35 states, according to the company.
Executives expect organic and inorganic growth to continue, CEO Adam Miller said on a Q3 earnings call last month.
That ongoing expansion will allow Knight-Swift to fill out its super-regional LTL network and ultimately create a national network to reach more freight and opportunities to complement existing truckload customers with LTL capacity, according to Miller.
Knight-Swift's LTL network expands
“We're kind of excited about getting to 2025 and really growing into what we've built out,” Miller said. “And then obviously, we look towards the Northeast and find an opportunity to grow organically or inorganically in that market to start to round out the nationwide network.”
The DHE deal with parent company Dependable Supply Chain Services also added terminals in Arizona and Nevada, and Knight-Swift is now focused on filling out service in its expanded LTL network, CFO Andrew Hess said on the Q3 earnings call.
Along the way, the LTL buildout has included acquiring multiple terminals in Texas once used by Central Freight Lines and also taking over multiple sites from FedEx Freight across the U.S.
Some of the former FedEx Freight sites acquired by Knight-Swift included:
- a $2.45 million property bought in March in Winona, Minnesota.
- a $1.5 million property purchased in November 2023 in West Burlington, Iowa.
- a $2.5 million property acquired in October 2023 in Lewisburg, Tennessee.
The reconfigurations in FedEx’s LTL network came ahead of the parcel delivery giant sharing publicly in June that it’s reviewing whether to keep FedEx Freight. A spinoff of the subsidiary would benefit the industry, TFI International Chairman, President and CEO Alain Bédard said last month on an earnings call.
Other Knight-Swift pickups have come from Yellow Corp.’s bankruptcy last year. Those additions entailed 13 properties totaling $51.3 million, 10 leases amounting to $2.2 million, and two other leases for $417,150, according to winning bid figures listed in bankruptcy court documents.
Maintaining a growth mindset beyond M&A
When considering acquisition targets, geography and expertise play key roles alongside the workforce and scaling potential, Stewart told Trucking Dive. And those benefits go both ways.
“As textbook as it sounds,” Stewart said, the company’s approach is to share best practices. “We bring teams together of people from both organizations and cover the biggest areas that are most impactful to the business.”
Those areas range from how a business recruits and develops drivers to how it captures people’s attention. “We'll compare notes, and we'll borrow pages from each other's playbooks so that we can both get better,” Stewart said.
That open-mindedness and the ability to recognize good ideas has allowed AAA Cooper, Swift Transportation, U.S. Xpress and other business units to improve, Stewart said.
“Regardless of which company appears to be performing better going in,” he said, “you need to go in with humility and expecting that you haven't figured it all out.”
