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Dive Brief:
- Ryder System expects the acquisition of Cardinal Logistics to add about $1 billion in revenue and $800 million in operating income annually, the company said last week in its fourth-quarter earnings.
- About 85 percent of Cardinal’s operating revenue comes from dedicated transportation, and the remaining 15 percent comes from its freight brokerage, contract logistics and last-mile delivery businesses, Ryder President and CEO Robert Sanchez said. earnings call.
- “Building on this foundation, Cardinal’s national footprint and complementary contracted services provide us with the opportunity to create scale and density in our dedicated transportation network,” he said, noting that the company expects “greater economies of scale” and “more flexibility to optimize resources. “
Dive Insight:
Ryder will transfer all of Cardinal’s 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 group has acquired about 2,900 electric vehicles as part of the deal, and Ryder notes the potential for synergies.
Among Fleet Management Services activities, the Ryder division provides maintenance work for its supply chain and dedicated operations.
“We expect substantial cost synergies as we begin servicing the fleet as well as the supply and disposition of Cardinal vehicles,” Sanchez said.
The deal, which closed on February 1, cost $290 million, according to annual report released on Tuesday.
Ryder expects the Cardinal acquisition to be marginally accretive this year and “more substantially accretive in 2025” after the companies are fully integrated, Sanchez said.