Dive Brief:
- Forward Air might have wanted to abandon its acquisition of Omni Logistics, but the deal has come with upside: the carrier has captured $17 million in annualized new premium LTL business in fulfillment and entertainment, interim CEO Michael Hance said on a Q4 earnings call.
- The combination of the company’s transportation networks will deliver cost savings and boosts Forward’s position to work with Omni’s customers with international operations that need domestic transportation services, said Hance, also the company’s chief legal officer and secretary.
- “Our shipper asset customer channel includes direct shippers that require an asset-based provider to increase their supply chain control,” Hance said.
Dive Insight:
After a tumultuous acquisition process that saw the departure of its CEO, Forward Air is integrating Omni into its operations, Hance said in the company’s Q4 earnings release.
The goal is to provide industry-leading premium LTL service, “making us the most compelling choice for customers with mission-critical freight needs,” he said in a statement.
Despite a dip in shipments, Forward Air reported a 6% year-over-year improvement in “pounds per day” in its LTL segment in the quarter. Weight per shipment increased 11% in the face of weak freight conditions.
LTL growth failed to offset falling demand in the company’s intermodal and brokerage services, which resulted in a 16% percent revenue decline for the company when compared to last year.
Hance said the company believes it will win new LTL business through strong service. In Q4, the carrier reported a 98% on-time service rate with a cargo claims ratio of 0.09%.
CFO and Treasurer Rebecca Garbrick said integrating Omni into Forward will generate savings as well as improve cash flow.
“It is all about integration, and it is all about realizing these cost synergies for that earnings power to be there, and therefore, the free cash flow to get back to the levels that you would normally see for the Forward Air side, and then obviously, adding in the Omni side,” she said.
