We are a leading non-asset based transportation and logistics services provider
offering a full suite of solutions, including customized and expedited less-than-truckload,
truckload and intermodal brokerage, and domestic and international air. We utilize
a proprietary webenabled technology system and a broad third-party network of transportation
providers to serve a diverse customer base in terms of end market focus and annual
freight expenditures. Our third-party transportation providers consist of individuals
or small teams that own or lease their own over-the-road transportation equipment
and provide us with dedicated freight capacity (which we refer to as independent
contractors), and asset-based, over-the-road transportation companies that provide
us with freight capacity under nonexclusive contractual arrangements (which we refer
to as purchased power). Across all transportation modes, from pickup to delivery,
we leverage relationships with a diverse group of over 9,000 third-party carriers
to provide scalable capacity and reliable, customized service to our more than 35,000
customers in North America. Although we service large national accounts, we primarily
focus on small to mid-size shippers, which we believe represent an expansive and
underserved market. Our customized transportation and logistics solutions are designed
to allow our customers to reduce operating costs, redirect resources to core competencies,
improve supply chain efficiency, and enhance customer service. As a non-asset based
transportation provider, we do not own any tractors or other power equipment used
to transport our customers’ freight. As a result, our business model requires minimal
investment in transportation equipment and facilities, thereby enhancing free cash
flow generation and returns on our invested capital and assets.
Less-than-truckload services involve the transport of consolidated freight of several
shippers to multiple destinations on one vehicle. Based on our research, we believe
that we are the largest non-asset based provider of less-than-truckload services
in North America in terms of revenue. Within our less-than-truckload business, we
operate 17 service centers throughout the United States and complement our service
center network with over 200 delivery agents, which are independent companies that
de-consolidate and deliver a portion of our less-than-truckload freight. Our point-to-point
less-than-truckload model enables more direct transportation of freight from shipper
to end user than does the traditional hub and spoke model employed by many other
less-than-truckload service providers. With fewer handlings, consolidations, and
de-consolidations per less-than-truckload shipment, we believe we are positioned
to deliver freight more cost-efficiently, faster, and with fewer damage or lost
goods claims than many of our competitors. We recently completed the complementary
acquisition of certain assets and related operations of Bullet Freight Systems,
Inc., a provider of nonasset based less-than-truckload logistics services with operations
in California, Oregon, Washington, and Illinois. We believe the Bullet acquisition is an example of our ability
to identify, execute, and integrate acquisition targets that enhance our service
capabilities and financial profile.
Truckload brokerage involves the sale and management of transportation services
related to the transport of a single shipper’s freight to a single destination.
This includes locating a qualified truckload carrier that can move the freight on
schedule, negotiating favorable rates for our customers, and managing the entire
shipping process from pickup through delivery. We are a leading truckload brokerage
operation in North America in terms of revenue. Within our truckload brokerage business,
we operate nine company dispatch offices and augment our dispatch office network
with an additional 42 brokerage agents, which are exclusive third parties that originate
a portion of our truckload brokerage revenues and receive a percentage of the net
margin generated.
According to the American Trucking Associations, or the ATA, beginning in October
2006, the over-the-road freight sector experienced year-over-year declines in tonnage,
primarily reflecting a weakening freight environment in the U.S. construction, manufacturing,
and retail sectors. During 2009, our less-than-truckload tonnage decreased 4.6%
from 2008, while less-than-truckload tonnage in the U.S. over-the-road freight sector
declined 23.2% during the same period. Throughout this downturn, we actively managed
our less-than-truckload business by adding new customers and streamlining our cost
structure to enhance our operating efficiency and improve margins. We believe our
variable cost, non-asset based operating model serves as a competitive advantage
and allows us to provide our customers with cost-effective transportation solutions
regardless of broader economic conditions. We believe we are well-positioned for
continued growth, profitability, and market share expansion as an anticipated rebound
occurs in the over-the-road freight sector.