This week, after a few weeks of rumors, we learned that UPS Paid $1.8bl for Coyote Logistics. This was no surprise to any reader of this blog as back in January of 2012 I wrote a post titled "The New Face of Brokerage". In this post I opined that Coyote Logistics was something unique and new and was not the "old" brokerage company. Great technology, great leadership and a "kick ass" attitude makes it one of the best. This week UPS realized this.
I also questioned in July of 2013 whether XPO's purchase of 3PD was an "end around" and whether this would give XPO capabilities beyond what Coyote could provide. In the end, for years now, I have seen a battle set up between XPO and Coyote - two new, fresh and innovative companies in the logistics space. It is refreshing to see these companies grow and lead the industry and I think it is no accident they have taken the industry by storm and surpassed many long standing companies in size. XPO and Coyote are truly innovative and we are watching The Innovator's Dilemma play out in the logistics and supply chain industry - old "mainstream" companies cannot innovate at the pace of these two companies.
However, they now have gone two separate ways. Through the incredible leadership of Bradley Jacobs, XPO is growing through acquisition. They want to own and lead and they are the "hunter".
Coyote has decided (apparently) that the way to grow the company faster and gain more capabilities is to allow itself to get acquired by a much larger company in UPS.
Personally, I think XPO has the right model by keeping control of its fate. As long as the capital is there, I say grow and compete. Don't allow yourself to get swallowed up. Which, I fear, is precisely what will happen to Coyote.
Anyone who has been to Coyote's headquarters knows it is a unique place. As I said above it is all about innovation, working at an incredible pace, young, aggressive and brash. It is an edgy company.
UPS is anything but what I see in Coyote. UPS is deliberate, slow, and measured. It is more about protecting what is than innovating into tomorrow. Perhaps it is possible UPS will truly allow itself to learn from Coyote but business history would say otherwise. Business history would say that UPS will swallow up Coyote and in 5 years we will wonder where it went.
UPS has a big opportunity here and I hope they take advantage of it... Let Coyote be Coyote!
Companies in This post:
Coyote Logistics: www.coyote.com
UPS: www.ups.com
XPO: www.xpo.com
A 25 year veteran of the supply chain and logistics industry blogs on all things logistics. Experience in 3PL, automotive and consumer goods logistics help bring a unique insight to this topic
Showing posts with label coyote logistics. Show all posts
Showing posts with label coyote logistics. Show all posts
Sunday, August 2, 2015
Wednesday, January 18, 2012
The New Face of Brokerage
I have really stayed away from endorsing certain companies just because I want to discuss more macro issues in the logistics industry however I will break with tradition for this post. I am seeing a trend develop with brokers where it is not your "father's broker" anymore. They truly are becoming logistics experts who do more than just "dial for diesels".
One such company I have talked to many times is Coyote Logistics. This company is young, aggressive, extremely smart and a leader in technology. They listen and understand your needs then formulate solutions.
I say this because people who have been in the industry a long time (include me in this!) have a mindset of "no brokers". We remember the days of brokers just calling and wanting your freight but taking no ownership in true logistics solutions. They were "brokers" in ever sense of the word: matching up buyers and sellers and that was it. After meeting Coyote I can tell you the model I described above is dead. Long live the new generation of brokers!
As a shipper you may want to look at companies such as Coyote to manage certain segments, certain promotional events, moves or even your full transportation needs. It is not a one size fits all and there are reasons to use these new breed of brokers and reasons not to. However, I would tell you that if you still have the mindset of "brokers are bad" I highly suggest you call Coyote and see if this new breed can change your mind. It certainly did mine.
One such company I have talked to many times is Coyote Logistics. This company is young, aggressive, extremely smart and a leader in technology. They listen and understand your needs then formulate solutions.
I say this because people who have been in the industry a long time (include me in this!) have a mindset of "no brokers". We remember the days of brokers just calling and wanting your freight but taking no ownership in true logistics solutions. They were "brokers" in ever sense of the word: matching up buyers and sellers and that was it. After meeting Coyote I can tell you the model I described above is dead. Long live the new generation of brokers!
As a shipper you may want to look at companies such as Coyote to manage certain segments, certain promotional events, moves or even your full transportation needs. It is not a one size fits all and there are reasons to use these new breed of brokers and reasons not to. However, I would tell you that if you still have the mindset of "brokers are bad" I highly suggest you call Coyote and see if this new breed can change your mind. It certainly did mine.
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