Maritime containership giant A.P. Moller – Maersk is continuing to build up its empire on dry land, today announcing it has spent $1.7 billion to buy Pilot Freight Services, a trucking fleet specializing in last mile solutions and big and bulky freight.
Copenhagen, Denmark-based Maersk bought the fleet from ATL Partners, a private equity firm in New York, and British Columbia Investment Management Corporation (BCI), one of the largest institutional investors in Canada.
According to Maersk, the deal will extend its integrated logistics offering deeper into the supply chain of its customers. Buying Pilot will complement earlier acquisitions in North America, such as Performance Team (PT), a business to business (B2B) warehousing and distribution firm, and Visible SCM, an e-commerce warehousing and parcel distribution company, Maersk said.
More specifically, Pilot will add new services within the fast-growing big and bulky e-commerce segment, thus increasing cross-selling opportunities, the company said.
In fact, the big and bulky segment has seen a flurry of recent mergers in 2021 alone, such as J.B. Hunt Transport Services Inc. buying Zenith Freight Lines LLC for $87 million, Werner Enterprises Inc. buying NEHDS Logistics LLC for $64 million, and Glen Mills, Pennsylvania-based Pilot itself buying both American Linehaul Corp. and DSI Logistics for undisclosed sums.
Those purchases were just two of 17 acquisitions Pilot made of franchisees and three more acquisitions of third-party businesses during its ownership by ATL and BCI. Since buying Pilot in 2016, its private equity owners built the firm from a family-owned business into the second-largest provider of business to consumer (B2C) home delivery in the U.S. Over that time, Pilot grew from 800 employees and $28 million of earnings in 2016 to 2,600 employees and $127 of earnings in 2021, ATL said.
By adding Pilot’s North American facilities-based transportation network of 87 stations and hubs, Maersk will now a “landside logistics network” of some 150 facilities in the U.S., including distribution centers, hubs, and stations. Maersk will also gain Pilot’s transportation capacity, which consists mainly of third party providers of trucking services encompassing both full truckload (FTL) and less-than-truckload (LTL) for heavy and bulky shipments with white glove service and a focus on expedited and time definite services, Maersk said.
Additional Maersk acquisitions in its logistics and services segment during 2021 include the European e-commerce service providers B2C Europe and HUUB, the air-based logistics company Senator International, and an agreement to buy the Asia-Pacific regional contract logistics provider LF Logistics, according to a message to investors from Maersk chairman Jim Hagemann Snabe and CEO Søren Skou.
Those investments in logistics growth were powered by a blockbuster year of financial results, following pandemic-triggered supply chain disruptions that have created severe challenges for shippers worldwide. Maersk’s 2021 revenue was up 55% over last year, reaching $61.8 billion and generating $24 billion in earnings, the company declared today.
The carrier was not alone in converting its profits on the seas into expanded holdings on land, as rival ocean container transportation powerhouse CMA CGM Group has likewise added a fleet of cargo jets, a third party logistics arm, and a last-mile delivery division in recent months.
