There are a lot of opportunities for brokers and owner operators to expand their own businesses; changes in the trucking industry present just such an opportunity.  The Wall Street Journal[1] reported last month that Knight-Swift Transportation is planning to invest in the less-than-truckload (LTL) industry by way of acquisitions. Knight-Swift already purchased a pair of LTL operators in 2021, and is now looking for even more companies to buy, particularly in the southwest and northeast United States. While a single company’s strategic moves may not indicate a broader industry shift, when the largest full-truckload carrier pursues new plans, it could show there will be more interest in the less-than-truckload (LTL) segment.

The LTL market involves carrying multiple loads from several customers on the same truck. This segment is smaller than the full truckload market, but it is more stable and has larger profit margins.  Even with all those positives, what really makes LTL businesses attractive for acquisition are the dedicated terminal networks LTLs typically have. The real property required for these terminals is so expensive that acquiring existing LTL businesses and the infrastructure they already have is a financially prudent way to enter the market or grow one’s presence in it.

LTL operators will need owner operators in the last-mile space if they want to attract investments like these.  In an environment that is hungry for growth through acquisitions it presents a lot of opportunity for those solo and small owner operators to gain new business themselves.

[1] “Knight-Swift Is Hunting for Trucking Acquisitions”, April 26, 2024, https://www.wsj.com/articles/knight-swift-is-hunting-for-trucking-acquisitions-1af3b2a9?mod=djemlogistis_h.

Related Posts