This morning Transplace announced the acquisition of ScanData, a parcel managed transportation platform that optimizes 400 million parcel shipments worth more than $2 billion annually. Transplace manages $9 billion of freight in its network of shippers and carriers, offering technology solutions including process automation, visibility and network execution as well as value-added services including truck brokerage and intermodal.
Craftsman Capital Partners was the seller in the deal; financial terms were not disclosed.
The acquisition allows Transplace to offer automated parcel optimization to its portfolio of more than 1,000 customers at a time when e-commerce growth is rapidly accelerating, omnichannel retail strategies have been priorities, and digital transformation has taken on a renewed urgency.
“Our customers have regularly requested parcel coverage and are looking forward to identifying cost advantages, optimization opportunities, and expedited service performance as it relates to parcel,” said Frank McGuigan, chief executive officer of Transplace.
By pooling customers’ freight and carriers’ capacity, Transplace optimizes moves across its entire network, so that one shipper can benefit from empty miles in another shipper’s private fleet. By adding parcel, Transplace can now optimize another mode and handle more of its customers’ supply chains, in addition to ocean, air, intermodal, truckload and less-than-truckload (LTL).
ScanData is certified for UPS, FedEx and USPS, McGuigan said, and is also integrated with the majority of the regional carriers, and hundreds of couriers and LTL carriers that handle parcels.
McGuigan said that while Transplace’s thesis on e-commerce growth was a significant driver in the deal, and retail shippers need more support to meet higher service expectations and mitigate elevated shipping costs, other shippers wanted the option to shift freight into parcel if it made sense.
“With the acquisition of ScanData, customers benefit from modal diversification across intermodal, LTL, TL, ocean and air, and parcel,” McGuigan said. “Transplace customers will have the flexibility and agility needed to navigate these challenging times today and into the future. Transplace customers have faced increased consumer delivery expectations along with rising shipping cost while also competing with and leveraging Amazon. Providing additional optionality for our customers with this acquisition is critical for them to maintain a competitive advantage in the market.”
Parcel integration and fulfillment networks are rapidly evolving to handle growing e-commerce demand, which tends to be more seasonally volatile than other parts of the supply chain. Investment in parcel optimization technology and physical fulfillment networks in the form of warehouses and delivery stations is building a vast infrastructure that can be leveraged by shippers who may not have previously shipped by parcel, or have only done so to a limited extent.
Finally, the deal is a good sign for merger and acquisitions markets in the freight technology space specifically and the transportation and logistics industry more broadly. Profound uncertainty about economic performance and credit availability affects buyers and sellers’ ability to find common ground and get deals done.
Transplace has been active in M&A for years and has built a robust internal process to manage its deal flow through the cycle. Along with recent deals by Lineage Logistics and Roper Technologies reported by FreightWaves, it’s become more clear that seasoned M&A practitioners have been able to continue to get deals done despite the pandemic and the economic shocks it brought about.