Well as predicted it appears that the Trucking Industry will be making some consolidation and now Fed Ex has agreed to buy yet another ground transportation trucking company; Watkins Trucking. This is a huge acquisition indeed and in fact it could be nearly one billion dollars in all.Watkins Trucking is an LTL or less than load carrier and it runs offices in Canada and Mexico, giving Fed Ex Ground a huge boost in North American International Trade. UPS has also announced a very big merger in the coming future although has not entirely disclosed what that might be?.
It appears we will continue to see large mergers in the Transportation Sector long into the future and especially in the next two-years as the fuel prices remain high and those carriers who are most efficient take home larger amounts of the profit and re-invest to further increase efficiencies thru economies of scale.For companies like Fed Ex and UPS well they are in a league of their own and are clearly using their size and ranges of shipping to their advantage, while capitalizing on all aspect of the business cycle, competition and high fuel prices. Consider all this in the transportation sector in 2006.
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By: Lance Winslow
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