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Aug 24, 2021

Freight Waves: Pilot Freight Buys Expedited Carrier to Integrate E-Commerce Delivery

Pilot Freight buys expedited carrier to integrate e-commerce delivery
Forwarder gains control of middle-mile truck capacity, service levels with American Linehaul.

By Eric Kulisch
24 August 2021

Pilot Freight Services, a logistics provider backed by private equity, announced Monday it has acquired expedited less-than-truckload carrier American Linehaul to provide intercity capacity for its growing e-commerce business.

American Linehaul runs a scheduled airport-to-airport, LTL linehaul system that forwarders often use as a less expensive, sometimes faster, alternative for shipments booked to move by air. The network — with more than 66 outbound airport cities and 70 destinations, connected through seven regional hubs — will now double as the strategic middle-mile piece in Pilot Freight’s vertically integrated suite of door-to-door, home delivery and installation services for bulky items such as sofas, mattresses and kayaks.

The acquisition enables Pilot Freight to provide a more consistent, reliable customer experience by controlling more equipment and drivers at a time when trucking companies are severely short of capacity and having trouble maintaining service levels.

“This dramatically reduces Pilot’s reliance on third-party providers and enables us to really control in an integrated way that end-to-end forwarding,” CEO Zach Pollock said in an interview.

The deal is also noteworthy because it involves a traditional freight forwarder purchasing an established transport supplier that also serves the broader logistics community, raising questions about whether they would want to give business to a competitor.

Pilot Freight management said American Linehaul will continue to operate as a separate brand and “neutral” linehaul provider for the freight forwarding community while giving Pilot assured access to the network for middle-mile needs.

The transaction was underwritten by Pilot owners ATL Partners, a New York-based investment firm with a portfolio of transportation and logistics companies, and British Columbia Investment Management Corp. Officials said Pilot’s investment will enable American Linehaul to expand capacity.

“This is a significant market differentiator. It changes how Pilot manages our freight market. We need better handling, reduced damage and more customized standard operating procedures. We need to control the flow of fragile, high-value goods from end to end at every stage of their life cycle and this really is a key component,” Pollock told FreightWaves. “The network and capabilities that American Linehaul brought to the table were a perfect fit for what Pilot needed.”

Pilot Freight Services, Glenn Mills, Pennsylvania, ranks in the Top 50 U.S. forwarders with an estimated $874 million in gross revenue, according to industry analyst Armstrong & Associates. It began as a domestic freight broker and now offers a suite of global transportation services, including expedited ground delivery, domestic next-day air, truckload brokerage, international airfreight and ocean forwarding, contract logistics, and warehousing.

Pilot in recent years has made a major push into omnichannel first-mile and final-mile services. The e-commerce strategy began by rolling up franchises in a series of acquisitions to better control local pickup from a retailer’s distribution center to a long-haul carrier. A couple of years it ago it began acquiring companies in the last-mile space and now counts itself as the second-largest last-mile delivery provider for big and bulky goods in the U.S. after XPO Logistics (NYSE: XPO). It provides home delivery from more than 80 locations for major furniture and bedding companies, online retailers, and big-box stores. In March, it acquired DSI Logistics, a non-asset-based provider of home delivery and installation services for heavy and hard-to-handle goods.

Many LTL carriers and 3PLs offer final-mile delivery and assembly, although not all have had an easy time succeeding in the sector and few, if any besides integrators like FedEx (NYSE: FDX) and UPS (NYSE: UPS), offer, turnkey capabilities from beginning to end of order delivery.

Pilot already has an internal fleet of straight vans and tractor-trailers, most of which are operated by independent contractors supplemented by some employee drivers, to handle pickup and delivery.

American Linehaul, based in Warren, N.J., competes in the same airport-to-airport sector as Forward Air, which also has expanded into home delivery and setup. Pollock said Forward remains a valued Pilot vendor.

“We feel like Pilot is uniquely positioned as really the only player in the U.S. who has first, middle and last mile with a core focus on e-commerce and omnichannel home delivery, as well as time-critical and value-added business-to-business shipping,” said Pollock.