Deutsche Post DHL sells US trucking brokerage for $83m

Deutsche Post DHL has sold its US third-party freight logistics subsidiary Exel Transportation Services to an American logistics company for $83m. Previously an operating of Exel Corporation, itself part of Deutsche Post’s DHL Supply Chain division, Exel Transportation will now be a wholly-owned subsidiary of Hub Group, Inc., a firm based outside of Chicago, Illinois.

Under new ownership, it is being renamed Mode Transportation, but will continue to have its headquarters in Dallas, Texas.

Key management will remain in place, including president Jim Damman, who said his team was excited to become part of a company with a “history of growth and innovation”.

He said: “We believe access to Hub Group’s dedicated fleet and efficient drayage operations, among other benefits, will allow us to outpace the competition.”

Exel Transportation, now Mode, is a logistics company and transport brokerage that operates through a network of around 300 independent business owners.

The company ended up 2010 with revenues of about $717m including intermodal revenue of $294m, truck brokerage sales of $27m and less-than-truckload sales of $85m.

Hub Group chairman and CEO David Yeager said the acquisition would bring “highly complementary services” into his group of companies.

“Mode is the strongest third-party agent network in the industry, with outstanding customer relationships and a diverse portfolio of solutions, including temperature-protected services,” he said, adding: “We are looking forward to working with the Mode Transportation team to continue its growth and expansion in the years to come.”

Mode Transportation started out as the Mark VII intermodal and truck brokerage in 1989, before two changes of ownership saw new parent Exel changing its name to Exel Transportation in 2001. Exel was itself acquired, by Deutsche Post, in 2005.

Deutsche Post DHL chief executive Frank Appel said last week that his company would continue to operate in North America through its Exel brand because of the brand recognition it enjoyed.

He said: “We’re still using the Exel brand – many people don’t know that it is DHL, but it is a well-established brand in the US, and it is one of the largest contract logistics business in the US.”

DHL pulled out of domestic package delivery operations in the US in 2008, finding the business was not sufficiently profitable.

Nevertheless, it maintains is services in international delivery, and Appel told reporters last week in New York that his company was “entrenched” in the US.

“We have seen this business with double digit growth – it is a good business, growing fast,” he said.

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