Forward Air (NASDAQ: FWRD) announced that it added 11 final-mile terminal locations during the first quarter of 2021. The Monday press release said of the new “Forward Final Mile” additions, eight were established in existing less-than-truckload facilities.
The Greeneville, Tennessee-based asset-light trucking and logistics company has been engaged in a growth strategy aimed at building out its service offering at existing terminals as well as acquiring final-mile and intermodal transportation providers.
Last summer, the company accelerated its growth plans as volumes within its core airport-to-airport LTL service network, which serves the airlines and cruise lines, suffered from the impacts of COVID-related shutdowns. In addition to adding final-mile service to its terminals, Forward began providing a more traditional LTL product to the market to improve volume throughput at these facilities.
“The cohabitation of Final Mile and LTL operations positions Forward for organic growth on a national scale — while greatly reducing the level of investment required for traditional Final Mile expansion into new markets,” the release stated. “This allows Forward to provide faster end-to-end service, moving freight from manufacturers or retailers directly to their customers’ doors.”
Forward has made several final-mile acquisitions in recent years.
It acquired competitor Towne Air Freight for $125 million in 2015, giving it a final-mile platform for home delivery of appliances and furniture. In 2019, it acquired FSA Logistix in a $27 million deal and Linn Star Holdings for $57 million. In September, it announced the $5.5 million purchase of CLW Delivery, which at the time the company said increased its final-mile network to include 110 locations from just eight two years prior.
The company’s growth plans have been met with some scrutiny, however.
At the end of 2020, an activist investor group, including former Forward executives, announced intentions to shake up the management team and board in efforts to redirect capital allocation and potentially divest noncore assets. The group claimed that it was the expansion of the product offering beyond the legacy LTL operation that was responsible for driving lower margins and returns.
The two parties reached an agreement in March, drawing a quick conclusion to the proxy battle. The investor group now has influence over five board seats, two of which they control outright. The new directors have already joined the board and stand for election at the May 19 annual meeting.
A final direction for long-term capital allocation at Forward has yet to be communicated by the new board, but it appears that the investor group is on board with Forward’s expansion in final mile.
“This is an exciting time at Forward as our growth trajectory continues across each of our businesses. Our Final Mile service offering has been a key area of focus over the past two years as we have expanded across the country,” said Tom Schmitt, chairman, president and CEO.