Dive Brief:

• Nolan Transportation Group (NTG), the 15th largest freight brokerage firm in the U.S. by net revenue, acquired Eagle Transportation, a Mississippi-based temperature-controlled freight brokerage and logistics company, according to a press release Jan. 17. The value of the deal was not disclosed.
• The move is part of Nolan Transportation Group's expansion into cold chain operations and bolsters its supply chain management, transparency and audit capabilities, according to the release. NTG offers third party air cargo, drayage, LTL, warehousing and other services, partnering with 30,000 transportation and trucking companies​ across the U.S., Canada and Mexico. ​
• Eagle Transportation will continue to service its legacy customers while incorporating NTG's additional service offerings, according to the deal announcement.

Dive Insight:

2019 was a hard year for the trucking industry as 640 companies closed their doors in the first half of the year alone, more than double the total number of closures for the entirety of 2018. A variety of factors were at play, including increasing driver salaries and the negative effects of the U.S.' trade war with China, which has shaken up freight markets and volumes and reduced manufacturing output nationwide.

The Cass Freight Index, which has been in decline since late 2018, began warning of a recession in the industry in July 2019, and conditions have yet to show signs of growth. The index for December 2019 saw its lowest levels since 2008, dropping 7.9% year-over-year. Cass does not expect the sector to see significant growth until the second quarter of 2020.

In spite of the challenges the industry faces, firms have seen acquisitions as a means of diversifying their service offerings and expanding market reach to hedge against a softening economy. 

In 2019, NTG acquired Birddog Logistics, a former brokerage division of Transportation Insight, in a bid to grow its North American network.

"As the marketplace demands better capacity sourcing and customer expectations continue to increase, larger outsourcing firms and brokerages have a significant advantage as companies look to reduce costs and guarantee on-time delivery," Transportation Insight Founder and TI HoldCo Chairman Paul Thompson said in a press release announcing the deal.

This opportunity exists in the cold chain sector in particular as demand for fresh grocery delivery is on the rise and healthcare supply chains rely on temperature-sensitive transport options. While NTG currently lists one of its service offerings as "refrigerated" transport, Eagle Transportation's network in Mississippi expands its capacity and geographic reach in a growing cold chain market. 

Other firms in the industry, such as J.B. Hunt, pursued similar acquisition strategies in 2019, looking to expand its services and differentiate itself from the competition by becoming a Certified Cold Carrier with the International Refrigerated Transportation Association (IRTA), a Global Cold Chain Alliance partner. The decision was motivated by the company's food supply transportation business, in hopes the certification would attract and cement partnerships with grocery and food retail clients.