• All Trucking Business is Up For Grabs

    Yellow Corp.’s acquisition of rival less-than-truckload (LTL) giant Roadway Corp. is the largest and latest example of how the LTL market is undergoing dramatic change, according to the lawyer that helped get the deal approved by federal regulators. “You can’t look at LTL carriers as just trucking companies anymore,” said Sean Boland, vice chairman of Washington D.C. law firm Howrey Simon Arnold &
    Dec. 1, 2003
    2 min read
    Yellow Corp.’s acquisition of rival less-than-truckload (LTL) giant Roadway Corp. is the largest and latest example of how the LTL market is undergoing dramatic change, according to the lawyer that helped get the deal approved by federal regulators.

    “You can’t look at LTL carriers as just trucking companies anymore,” said Sean Boland, vice chairman of Washington D.C. law firm Howrey Simon Arnold & White, in an interview with Fleet Owner. “They can no longer view themselves in isolation from the supply chain strategies used by shippers and expect to survive.”

    Moreover, a wide array of transportation firms have poached on territory that used to be exclusively dominated by LTL carriers – forcing LTL companies in turn to merge and expand their own service offerings in order to stay in business.

    “Today there are only four major national LTL carriers compared to 50 back in the 1980s. On top of that regional LTLs have grown fast, with United Parcel Service and FedEx also getting more into LTL,” Boland said. “Even truckload carriers have moved to a degree into the LTL market.”

    That changing mix of competitors in the LTL segment is one reason Boland thinks the U.S. Department of Justice’s antitrust division gave the go-ahead for Yellow’s buyout of Roadway.

    “The bottom line is that there is so much competition from so many different sources that all trucking business out there is contestable,” he said. “Shippers have a lot of power – you don’t push Wal-Mart and Home Depot around on transportation costs. They can shop for the best deals from many players, so if the big LTLs attempt to raise prices, those other players will go after that business in a heartbeat.”

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