“This is a strategic investment that will further advance our final mile delivery capabilities of ‘big and bulky’ products to consumers and expand our expertise in furniture delivery,” John Roberts, president and CEO of J.B. Hunt, says in the the news release announcing the deal. Cory will become part of Hunt’s Final Mile service.
“'We have high expectations that there will be a lot of demand for that heavy goods delivery,' Roberts said at an investor conference in November,” Jennifer Smith reports for the Wall Street Journal. “That’s the two guys in a truck, appliances, furniture, things that the parcel guys don’t want to handle. … There’s not a great number of players on the national front.”
The Lowell, Ark.-based Hunt has been has been on a roll. When it last reported results on Oct. 15, its quarterly revenue was $2.21 billion, up 19.9% on a year-over-year basis, Gemma Cottrell writes for Fairfield Current. Seven analysts have issued estimates for the earnings it will report Tuesday, with the lowest coming in at $2.25 billion and the highest coming in at $2.36 billion.
Cory, a family-run business founded in 1934, has more than 1,000 independent contractors, carriers and delivery drivers who make more than 2.5 million deliveries a year. It has 14 warehouses and other customer-owned facilities across the continental United States.
“Last-mile delivery, powered by the growth of e-commerce, has been a boon to the trucking industry, particularly to companies like UPS and XPO Logistics that were already positioned in that field. In 2018, e-commerce grew by 16%, according to Peggy Dorf, a market analyst at DAT,” Rachel Premack writes for Business Insider. “The demand is constant and it's constantly growing,” Dorf previously told Premack.
The deal “strategically makes all the sense in the world,” Donald Broughton, principal managing partner of Broughton Capital, tells Transport Topics.
“Broughton said ‘big and bulky’ packages are much different than parcels typically associated with deliveries by UPS and FedEx, and this purchase will benefit J.B. Hunt as it competes head-to-head with companies such as XPO Logistics and others moving aggressively into the sector,” TT’s Dan Ronan writes.
“There is a need for a ‘final-mile guy’ to show up, make an appointment at your house to -- politely and without leaving anything behind -- put the big screen TV exactly where you want it on the wall, hooking it up and making sure it is working exactly the way you want it, or setting up the above-ground swimming pool, because they (big and bulky items) do not assemble themselves,” Broughton tells Ronan.
“The market for so-called last-mile deliveries amounted to $8.9 billion in 2018, up about 10% from the previous year, said Satish Jindel, founder of SJ Consulting Group,” Bloomberg’s Thomas Black reports.
“That’s a much faster growth rate than for regular freight and will continue for several years as young people age, start spending more and buy bigger items,” John Hill, president and chief commercial officer of Pilot Freight Services, tells Black.
“‘Millennials buy everything online,’ Hill said. ‘They’re very comfortable making those purchases sight unseen.’ Pilot has been expanding its national network, including through the July purchase of a heavy-goods delivery company in the Minneapolis area,” Black adds.
Greenwich, Conn.-based XPO, meanwhile, has physical assets in 32 countries, with more than 98,000 employees and 1,529 locations and is the largest provider of last-mile delivery in North America. Last year it rolled out services allowing consumers to track their shipments through Google Search or smart speakers such as Amazon’s Alexa.
“Still, more carriers are looking to grab a piece of the action,” writes the WSJ’s Smith. “Last year, Ryder System Inc., an operator known for its truck-leasing business, bought final-mile delivery specialist MXD Group for $120 million. And this week, Averitt Express Inc., a trucker based in Cookeville, Tenn., launched a new distribution and fulfillment service that includes ‘white glove’ delivery."