Dive Brief:
- Ryder System expects its acquisition of Cardinal Logistics to add about $1 billion in revenue and $800 million in operating revenue annually, the company reported last week in its Q4 earnings.
- About 85% of Cardinal’s operating revenue comes from dedicated transportation, and the remaining 15% is derived from its freight brokerage, contract logistics and last-mile delivery businesses, Ryder Chairman and CEO Robert Sanchez said on an earnings call.
- “Building upon this foundation, Cardinal's national footprint and complementary contractual services provides us with opportunity to build scale and density in our dedicated transportation network,” he said, noting the company expects “greater economies of scale” and “more flexibility to optimize resources.”
Dive Insight:
Ryder will be transitioning all Cardinal assets under the Ryder brand over the next six to 12 months, which includes “all trucks, trailers, warehouses, and buildings,” a spokesperson told Trucking Dive in an email.
The South Florida-based supply chain and transportation conglomerate has acquired approximately 2,900 power vehicles as part of the deal, and Ryder is noting the potential for synergies.
Among its Fleet Management Services business, the Ryder segment provides maintenance work for its supply chain and dedicated operations.
“We expect meaningful cost synergies as we begin servicing the fleet as well as procuring and disposing of Cardinal vehicles,” Sanchez said.
The deal, which closed Feb. 1, cost $290 million, according to an annual report released Tuesday.
Ryder expects the Cardinal acquisition to be marginally accretive this year and “more meaningfully accretive in 2025” upon fully integrating the companies, Sanchez said.
