This sound is generated automatically. Let us know if you have any feedback.
Dive Brief:
- Forward Air may have wanted to abandon its acquisition of Omni Logistics, but the deal has paid off: the carrier has earned $17 million in annual new premium LTL business in fulfillment and entertainment, said interim CEO Michael Hance 4th quarter earnings call.
- The combination of the company’s transportation networks will yield cost savings and strengthen Forward’s position to work with Omni customers with international operations that need domestic transportation services, said Hance, also the company’s chief legal officer and secretary.
- “Our asset shipper customer channel includes direct shippers who require an asset-based provider to increase control of their supply chain,” Hance said.
Dive Insight:
After a tumultuous acquisition process that led to the departure of its CEO, Forward Air is integrating Omni into its operations, Hance said in the company’s fourth quarter release of earnings.
The goal is to provide industry leading premium LTL service, “making us the most compelling choice for customers with critical freight transportation needs,” he said in a statement.
Despite the drop 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% amid weak freight conditions.
LTL growth failed to offset declining demand in the company’s intermodal and brokerage services, which resulted in the company’s revenue falling 16% compared to last year.
Hance said the company believes it will win new LTL business through strong services. In the fourth quarter, the carrier reported an on-time service rate of 98% with a cargo claim ratio of 0.09%.
CFO and treasurer Rebecca Garbrick said integrating Omni into Forward will create savings as well as improve cash flow.
“It’s all about integration, and it’s all about making those cost synergies to have that earnings power, and therefore, the free cash flow to get back to the levels that you would normally see on the Forward Air side and on the continuity obviously, adding to the Omni side,” he said.