Certainly to many the announced trucking industry merger caught some by surprise.  Both companies have been well-run with class-leading best practices and the new company will be headquartered in Phoenix, Arizona.  It will be the largest in its business class and a huge enterprise with $5B in annual revenues, supported by 23,000 tractors, 77,000 trailers and 23,000 employees.  To most sector analysts, this match-up makes sense and will create a North American trucking industry behemoth.

With that said, the aggregated company will be but a small fraction of the US trucking industry, with only about 5% of total market share. The high-level of market fragmentation in the trucking sector doesn’t give any one company enough pricing control today, and this won’t markedly change with the merger.  With the sector going through some dynamic challenges, there is a strong potential for further consolidation though.  The trucking industry faces many challenges including but not limited to driver shortages, driver compensation and retention, current capacity overages, replacement of and updating equipment, installation/maintenance of new electronic equipment and future driverless units, again to mention just a few.   We see these dynamics and some tightening in key trade flows to cause a wave of other match-ups, further changing the complexion of the trucking sector in the US.

In the case of the combined resources of Knight-Swift, Swift’s fleet size, logistics expertise and contracts with railroads in specific lane corridors combined with Knight’s best in industry operating margins and brokerage expertise sets a solid foundation for very successful company.

As for the future suggest that there will now be many more consolidations/mergers in the trucking industry.

JoC editorial:  Knight-Swift Merger Sets Stage for More Capacity Control