XPO Logistics has purchased the non-asset logistics services provider East Coast Air Charter for $9.25 million, giving it a foothold in the express charter market.
Former owner William McBane will continue to run the company, and XPO has already begun selling air expedited services from its 59 offices in the United States and Canada.
XPO had been offering expedited air charter services, carried out by East Coast, for a number of years, but as demand from XPO’s customers increased, company management decided to cut out the middle man, XPO Chief Executive Officer Brad Jacobs told American Shipper
. Last year, East Coast turned in revenues of $43 million; within the next couple of years, Jacobs hopes to push that number up to around $150 million.
“Our customers were demanding this type of service more and more, and we didn’t want to go out of shop in order to get it,” Jacobs said. “We wanted to have that in house.”
The move is all part of XPO’s dedication to expedited air charter, or what Jacobs calls the “ambulance for air freight.” In the past, XPO has gotten a lot of expedited work domestically, but Jacobs anticipates cross-border traffic between the United States and Mexico will continue to grow. Expedited air cargo, in general, is a fast-growing market propelled by the automotive, oil and gas, and pharmaceutical industries.
“That’s a pretty healthy market because as inventories have come down, as business in America has gotten more efficient and is doing more just in time ... you end up having more expedited needs,” Jacobs said.
While this latest acquisition now gives XPO it desired autonomy in the air expedited arena, Jacobs doesn’t anticipate slowing down. In the past 14 months, XPO has completed four additional acquisitions and has opened 17 offices. His goal for 2013 is to generate $250 million in revenue through three more acquisitions.
“We’re on a similar acquisition pace as we were last year,” he said.
(For more details about XPO's expansion plans, read the January American Shipper
article "Technology as differentiator, pages 41-43.) - Jon Ross