DB Schenker continues international growth strategy with acquisition of USA Truck

This week DB Schenker announced that it is acquiring USA Truck, a leading truckload carrier in North America, for $435m. The acquisition is part of DB Schenker’s vision of becoming a full-service supply chain provider in major economies. DB Schenker stated that it would build on USA Truck’s existing network and expand its land, sea, and air services.

The acquisition fits within the company’s ‘Primus’ strategy to increase profitability and focus on more international growth markets. According to DB Schenker, land transport in America is becoming an increasingly important activity area. In addition to expanding in North America, activities in South America are being widened. DB Schenker is also continuing to expand its land transport business in Asia. Currently, land transport accounts for 32% of DB Schenker’s group revenues and 9% of EBIT.

The company has also recently established a new venture unit, seeking to make investments in e-commerce and logtech businesses. The unit made its first investment in April 2022 with a participation of Series A funding in start-up Warehousing1, an e-commerce fulfilment platform provider based in Berlin, Germany.

Other recent DB Schenker acquisitions include Vahala Group in Finland in October 2021 and Spanish companies Transportes Santos Campos and the Loserco Group. The acquisition of the Vahala Group gives DB Schenker national coverage in land transport in Finland. The acquisitions in Spain expand its presence in the land transport sector in two key regions of Spain, Andalucía and Valencia.

The acquisition of USA Truck is a much bigger deal. The company is a top 25 carrier ranked by operating revenue and had $710.4m in consolidated operating revenue in 2021. The company operates two main businesses: Trucking, consisting of truckload and dedicated freight services and USAT Logistics, a freight brokerage, logistics and intermodal rail service. USAT Logistics was the faster-growing division in 2021. Overall, USA Truck provides services to more than 600 customers.

The acquisition will likely push DB Schenker’s Land Transport revenues to close to €8bn in its next financial year. DB Schenker continues to expand via acquisitions in key growth markets. There remains some uncertainty, however, as its indebted parent, Deutsche Bahn, continues to make noises about a possible sale of DB Schenker itself. In February 2022, there were press reports that DB Schenker was being prepared for sale. According to the reports, parent Deutsche Bahn is working with consultants and legal advisors for a possible transaction later in 2022. Options being considered include a full, majority or minority stake sale, or an IPO.

Source: Transport Intelligence, 30th of June 2022

Author: Paul Chapman