Thompson Reuters News: Panther Expedited Services is for sale
- Thread starter ATeam
- Start date
The first news story was on February 28. The second was on May 3 with Arkansas Best being injected into the mix of named potential buyers. Quoted sources are unnamed. Comments from known players are not being made. I have not worked this story or interviewed anyone on this topic.
It seems to me that Fenway is shopping Panther around and creating occasional news "leaks" to stimulate interest. It also seems that the price is too high or there may be legal issues yet to resolve, othewise a deal would have been closed by now.
The above is pure speculation on my part. I have no knowledge beyond what is available to the general public. This is just my reading of the tea leaves.
Last edited:
I'm curious as to why it appears that Reuters is the only source for this story. None of the trade rags have reported it with the exception of Phil's piece in OD and one other publication. But both site Reuters as the source. While Panther is but a small fish in the trucking pond, one would think their being for sale would garner some ink, virtual or otherwise from Transportation Topics, Traffic World, CCJ or other industry publications. I don't get it.
I think Morgan Stanley is just shopping it at this point. With very limited information, the only sale I wouldn't be sold on would be to E-1. Cheaper rates, cheaper DH, and a structured FSC which is just a code phrase for " yes we are laughing and keeping part of it".
They would either have to come up to Panther's rate or they likely would wind up buying a company with half its fleet.
They would either have to come up to Panther's rate or they likely would wind up buying a company with half its fleet.
Last edited:
Panther really isn't worth the ink....150M..is just lunch money to some of the big players...
They are big in our little world....but as Moot said....small fish = bait
They are big in our little world....but as Moot said....small fish = bait
LOL..yep Dave....hard to Imagine a P2 van would actually makes less under the E-1 flag eh? like .87 a mile.....
While turnover at expedite carriers is less than that of truckload carriers, it is still high with most. Losing half the fleet would not be a deal-killing consideration. Whether they are sold or not, expedite carriers do that every year.
Recruiting brings new horses through the front barn door to replace those that leave out the back. It must be easier for carrier to do that than to mind the back door since so many do it that way. But that is a retention topic and this is about the potential Panther sale. Just note that the already high turnover rate among expedite carriers means that losing half the fleet if a carrier is sold would not be viewed as anything more than a temporary problem to be solved by recruiting.
Whether we run with a carrier or have our own authority, expediters are trucks, not drivers; commodities, not capacity owners; purchased transportation, not people; entries on a database screen that are managed and optimized to meet carrier needs; dots on a map that are moused over for info and contacted to see how cheap we will run. (A little different at FedEx Custom Critcial where ridiculously cheap offers are broadcast to the fleet with the knowledge that some of them will be accepted. The goal is the same. Find the trucks that will run cheaper than others.)
I don't imagine prospective buyers of Panther asking themselves, "What will the drivers and fleet owners think?" I imagine them asking "What will the immediate, short-term and long-term retention effect be of this purchase and how long will it take us to stabilize the turnover rate at a level we can live with?"
I imagine prospective buyers to be more focused on "How can the purchase of Panther help us upgrade our customer base and revenue stream, and what will we have to do to retain those customers if we buy Panther?"
Any short-term capacity challenges created by trucks leaving Panther because of the sale could be addressed by brokering the loads out to other carriers, and very possibly to some of the very same trucks that left and joined other carriers.
I might be wrong about this, and I would love to hear evidence to the contrary, but it seems to me that technology (the internet and transportation management software) makes it easier than ever for carriers to cover loads without relying on their own fleet. During the recession, many carriers added brokerage services to their portfolio as a way of increasing revenue while revenue from hauling freight declined. When the recession ended and carriers started posting big profits again, these brokerage add-ons did not go away.
It seems to be getting more and more like there is one fleet of all trucks. A shipper finds a comfortable point of entry into the system and thereby gains access to thousands of trucks at once. Access may be provided by a a broker or a carrier. From the shipper's point of view, there is not much difference any more. Everyone is trying to do the same thing.
"Just call us, Mr. or Ms. shipper. One call does it all. Whatever your need; LTL, expedite, cold-chain (reefer), truckload, heavy haul, whatever; we can handle it. We may have just five trucks, five hundred trucks or no trucks. It does not matter. Through our network of partner carriers (relationships that can be created in the time it takes to send a fax and run a quick credit check), we can find you a truck and make your life easy."
The emphasis is less on retaining good drivers and more on making money by covering loads and maximizing the broker's or carrier's profit margin while doing so (the difference between what the shipper is charged and what the truck is paid). With so many ways for a broker or carrier to cover a load these days, if retention was ever important to a carrier, it is less so now.
(Exceptions of course, like Load-1 that has a recruiting department of one person and a waiting list of people -- not trucks -- wanting to get in, and Landstar Express America whose turnover rate is exceptionally low compared to others.)
For the reasons stated above, I do not think that losing half the fleet would be a significant issue to someone considering the purchase of an expedite carrier. Indeed, an anticipated loss of half the fleet upon the sale of a carrier could be a negotiating point in the buyer's favor that would help bring down the price.
Last edited:
Phil..you are correct as Zorry said you are a money type guy...with the way this business is set-uo now...size doesn't really matter....if they lose half the fleet they'll just use other carriers till they stabilize...
I agree to a point with Phil in that it won't prohibit a sale, but it very well may change the structure or the actual price. As to whether they care about the drivers or anything, I doubt it as well. These kind of deals are dollar driven and little else.
Even more so with a non-asset purchase.
What I think may be a little different at this point in time is a lot of uncertainty in the economy all the way to capacity. If the idea of half the fleet leaving and can easily be replaced is a fallacy.
Several years ago, would say no problem. Today, not so much.
Why? Not enough available credit and lower freight rates. Plenty of drivers, but way too many can't get into a truck. Look at expediter truck sales. They are a fraction of years past.
If you are going to attempt the recruiting game, you have to offer existing operators something better than the other carriers/competitors. In this case, E-1 isn't there. If you are going to throw a serious investment at it, might make sense to put it on the front end. Not sure what that ratio would be?
As mentioned, their is always the partner carrier route. Again another number crunching exercise.
Outside carriers will be more expensive, and maybe more than a current market rate if they know that carrier is constantly desperate for coverage. Supply and demand rules that one.
And again, if that takes place, it erodes the value of the initial offering.
How long it would take to recover would involve numerous factors. Don't forget either that the minute they indicate a struggle, every competitor under the sun will be wanting to expand and exploit those weaknesses.
Even more so with a non-asset purchase.
What I think may be a little different at this point in time is a lot of uncertainty in the economy all the way to capacity. If the idea of half the fleet leaving and can easily be replaced is a fallacy.
Several years ago, would say no problem. Today, not so much.
Why? Not enough available credit and lower freight rates. Plenty of drivers, but way too many can't get into a truck. Look at expediter truck sales. They are a fraction of years past.
If you are going to attempt the recruiting game, you have to offer existing operators something better than the other carriers/competitors. In this case, E-1 isn't there. If you are going to throw a serious investment at it, might make sense to put it on the front end. Not sure what that ratio would be?
As mentioned, their is always the partner carrier route. Again another number crunching exercise.
Outside carriers will be more expensive, and maybe more than a current market rate if they know that carrier is constantly desperate for coverage. Supply and demand rules that one.
And again, if that takes place, it erodes the value of the initial offering.
How long it would take to recover would involve numerous factors. Don't forget either that the minute they indicate a struggle, every competitor under the sun will be wanting to expand and exploit those weaknesses.
zorry
Veteran Expediter
Let's pretend E1 buys Panther. Say they lose ,25 of thier combined capacity. They cut thier cheaper freight . The people who stay benefit from a larger frt base. They reduce dh in some areas.They broker cheaper frt at a small profit.
They will win.
The internet has changed this industry in thier favor.
To the shipper and carrier that scruffy team in the $25,000 auction truck is just ad good as the Madsens or the Caffees on the day they properly cover a load, Actually better when they do it cheaper.
Sadly, everybody can't lease on to Load 1 or LEA.
Too much of the frt will be elsewhere.
They will win.
The internet has changed this industry in thier favor.
To the shipper and carrier that scruffy team in the $25,000 auction truck is just ad good as the Madsens or the Caffees on the day they properly cover a load, Actually better when they do it cheaper.
Sadly, everybody can't lease on to Load 1 or LEA.
Too much of the frt will be elsewhere.
That would be the ideal situation from a fleet owners prospective. Under those conditions, we would only stand to benefit. Not from cheaper rates, but E-1 bringing thier contractor rates in line with Panther.
If we can maintain our current rates and have a larger base of loads, that is a win-win.
If we can maintain our current rates and have a larger base of loads, that is a win-win.
You don't have to replace trucks, you just have to cover loads. In terms of total truck count among all expedite carriers, how many trucks are available today compared to five, two and one year ago? That is not an easy number to determine but I get no sense that there is a decline. When a carrier loses half its fleet, the trucks do not disappear from the total fleet of all expedite trucks on the road.
During the Great Recession, the number of AVAILABLE trucks and carriers declined as owner-operators and carriers washed out of the business. But as the economy improves, parked trucks get revived and new trucks get built.
An interesting thing to see is the more modest nature of trucks being built today compared to those built before the recession. Sleepers on are getting smaller on new expedite trucks and/or less featured. That indicates that owner-operator and fleet-owner margins are being squeezed by lower rates and higher costs. Yet the total count of trucks seems to be holding its own.
Short story: Expediters are being paid less but they continue in the trade. In the bigger picture, it seems that as the U.S. middle class shrinks, expediters are participating by moving lower on the scale into the ranks of the working poor instead of higher on the scale into the ranks of the upper middle class.
Another interesting thing to see is the emergence of Expediter Services with 100+ trucks compared to fleet owners of a decade ago when someone who ran five trucks was considered a large fleet owner. Notice the sleepers on those trucks. They are factory sleepers on trucks purchased at big discounts to what smaller buyers would pay. Less money going into trucks, larger numbers, and they seem able to keep those trucks filled with drivers and the carrier satisfied. We may not agree with how it is being done, but being done it is.
Another difference between now and ten years ago is the presence of Sprinter and other 3+ skid vans. I have heard more than once a load being offered to our straight truck at "The Sprinter rate" because it can fit on one of these vans. Are Sprinters eating into the straight truck freight? Based on the offers we receive that we did not receive before, it would seem so. That might have something to do with shrinking truck sleeper size too.
Even if the number of straight trucks is declining, new ways are emerging to move the freight they used to haul.
Last edited:
Some good observations that I can't really argue with. As for truck sleepers, I do think there is a move to smaller ones. Same rates as ten years ago, but just the truck price has practically doubled. Something has to give. The other factor is many sleeper companies went out or have a uncertain future. Certainly different times in which one must look at numerous variables.
As with any buy out, or whatever you would like to label it. Most folks will move on to a known factor. Right now they are unknown, ie: who will take control of us? What will our new rates be? Cheaper freight? The good ones will leave earlier than the others, just so they can have that known factor.
Current Carrier buys them:
If a buy out reduces the fleet, even by 45 to 50 %, the company that is taking control still has thier fleet to draw from along with other carriers to fill in the gaps.
Non-carrier buys them:
Manage's the fleet to ensure them nothing will change for now. They will do an analysis to see what path they will take. They can not contuine on the same path, so that will be another unknown factor to those that stay.
Carries will and have said they are not in the running, at the same time, the higher up's are doing a look over of them. No one has lied, as one hand doesn't know what the other is doing..... been there done that.
Who buys them right now, or "in the running", is all rumors.
Current Carrier buys them:
If a buy out reduces the fleet, even by 45 to 50 %, the company that is taking control still has thier fleet to draw from along with other carriers to fill in the gaps.
Non-carrier buys them:
Manage's the fleet to ensure them nothing will change for now. They will do an analysis to see what path they will take. They can not contuine on the same path, so that will be another unknown factor to those that stay.
Carries will and have said they are not in the running, at the same time, the higher up's are doing a look over of them. No one has lied, as one hand doesn't know what the other is doing..... been there done that.
Who buys them right now, or "in the running", is all rumors.
Since I am a optimist, I do see a silver lining of sorts with folks like Expediter Services. They are a great training opportunity for new folks before they come to work for someone like us. If we can maintain equipment offer higher pay that is desired by teams, that only helps us.
The large fleet owner with over 100 trucks is going to be getting a better deal on equipment but my opinion is that difference gets burnt up in higher operating costs. I don't have a pile of employees, offices and other associated costs. Kind of like the small verses large carrier syndrome.
The large carriers also aid in setting a price point for others. With ES, they are currently with the Fed, but left Tri-state, E1 and Panther. Running out of places to move to.
The large fleet owner with over 100 trucks is going to be getting a better deal on equipment but my opinion is that difference gets burnt up in higher operating costs. I don't have a pile of employees, offices and other associated costs. Kind of like the small verses large carrier syndrome.
The large carriers also aid in setting a price point for others. With ES, they are currently with the Fed, but left Tri-state, E1 and Panther. Running out of places to move to.
Last edited:
Possibly, but one would have to be a carrier for that to apply.