Uber Freight to Acquire Transplace for $2.25B | Transport Topics

As of July 22, 2021, Uber Freights have announced the agreement that they have with Transplace, a transportation provider that ranks 13th in the Tap 50 largest logistics company with Uber Freights placing 41st, and is expected to close later on this year, or in the first half of 2022. Transportation takes a huge part in logistics, so if your business or your company is looking for logistics that could manage your transportation, Sure Logix LLC logistics and transport management is honestly the way to go. With that aside, here are a few details about Uber Freight and Transplace.

Is Uber Freight owned by Uber?

Does Uber do logistics? Well in fact, yes they do, and Uber Freight is actually the logistics arm of Uber that is there to help truck drivers connect with shipping companies. They have recently announced that they have a definitive agreement to acquire the managed transportation property called Transplace, from their TPG Capital for $2.25 billion dollars.  In the deal, it states there that Uber Technologies Inc., Uber Freight’s parent company. Would give up to $750 million dollars’ worth of common stock, and the rest would be paid in cash.

The head of Uber Freight, Lion Ron, said that deal would create an industry’s first shipper-to-carrier platform that would transform the shippers’ entire supply chains, deliver operation resilience, and reduce cost at a time when it matters most. 

With this deal, Frank McGuigan, the CEO of Transplace, expects that the shippers would be able to see the greater efficiency, transparency, and the carriers would be able to benefit from the scale to drive in improving operating ratios. They, as a logistic company themselves, expect that they could significantly reduce shipper and carrier amputation to the benefit of highway and road infrastructures and the environment.

Revenues

Evan Armstrong, an industry consultant and the president of Armstrong & Associates Inc said that in the total gross revenues in domestic transportation management in the 3PL segment, the transportation management represents about 17 percent of it, and the other 83 percent would have to come from their freight brokerage. 

In his opinion, Transplace has a very good technology when it comes to managing larger transportation networks for customers, and Uber Freight has good technology when it comes to the transactional freight brokerage business, so when it comes to the terms of combination, they gave both developed good propriety and they both not have complementary technologies that would make sense strategically.

The deal hasn’t been finalized yet, but once they do, the brokerage of the Uber Freight would continue to operate individually from Frisco, Texas-based while Transplace would be managing the transportation services there as well. This is according to the San Francisco-based digital freight broker.

Are they both Compatible?

When it comes to compatibility, Armstrong said that he thinks it is a pretty good match culture- wise since there is a lot of emphasis going around on each of the company’s continual growth and improvement. Last 2020 during the domestic transportation management segment that Transplace and Uber Freight had participated in, they had gross revenues of $91.2 billion dollars and their net revenue was $13.2 billion dollars. 

With this, Armstrong stated that the net revenues had then been growing at 10.5 percent annually and it is a compound annual growth rate from 1995 to 2020. He then proceeded to estimate that the potential market size would have to be $457 billion dollars for the domestic transportation 3PL segment.

Uber Freight expects that with this transaction, it would be able to accelerate its path to profitability and this partnership would help break even on an adjunct ranking before the interest taxes would be depreciation and amortization basis by the end of the year 2022. Transplace has about 3,100 employees across North America and Europe making it profitable and it is expected that it could generate about $100 million dollars in EBITDA in 2021.

How do you get Uber Freight loads?

There is an application that you could use that could help you navigate and it’s a place where you could book the load. They have transparent pricing and salt loading suggestions for a hassle-free booking, 24/7 customer support and Mobile POD submission with the payment arriving within 7 days of submitting the Pod for free quick pay, and the application could also inform you with all of the written reviews of shipping facilities, upfront facility details, and return load booking before you could book a load.