COVID-19 has forced people and businesses to work together to stay afloat, and the logistics and transportation industry is no exception. During the pandemic, consolidation in the shipping space emerged as a way to enable the rapid movement of goods in light of major supply chain roadblocks. In the United States, last-mile delivery companies are following suit.
Consolidation in the last-mile delivery space continued this week with Monday’s announcement of a merger between Capital Express and ADL Delivery, two regional last-mile providers that are combining their platforms for greater coverage across the U.S.
Omaha, Nebraska-based Capital Express primarily serves the Midwest, with facilities in states like Minnesota, Wisconsin and Iowa. It provides courier, transportation, warehousing and logistics services. Tampa, Florida-based ADL Delivery covers the Southeast with locations in Florida, Georgia, South Carolina and more, specializing in B2B truckload deliveries, LTL shipments, pallet deliveries and other final-mile services.
The newly established holding company, which has not yet been named, will integrate the companies’ facility networks, which cover a combined 45 locations in 15 states, to begin building a nationwide provider of customized and final-mile logistics services.
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Capital Express founder Monte O’Hara will serve as the new company’s CEO, while ADL Delivery co-owner Thomas Jowers will sign on as the COO. John Benko, former president of the Customized Logistics and Delivery Association (CLDA), and Randy Edmonds, who serves on the CLDA’s Final Mile Forum and Expo Committee, will join as president and CCO, respectively.
“These two great companies have combined territories covering the Midwest and Southeast and are led by two of the most respected and successful entrepreneurs in the industry, [O’Hara and Jowers],” said Edmonds.
Capital Express and ADL Delivery are also partnering with Atlanta-headquartered private equity firm Red Dog Equity LLC to provide the new holding company with growth capital. The firm’s co-founder, Tom Connolly, formerly served as senior vice president of acquisitions at XPO Logistics.
“This is a key inflection point for the industry, and we believe there are significant opportunities to leverage best practices, infrastructure and expertise between ADL and Capital Express, to not only continue to grow within our existing territories, but also expand into new markets,” said Jowers. “With Monte, John, Randy and the Red Dog team, the depths of knowledge and resources this team brings to the table is second to none.”
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As a holding entity, the merged Capital Express and ADL Delivery company will look to expand its delivery range beyond the reach of its combined facility network. To do so, it will leverage its partnership with Red Dog to acquire more companies that service the final mile in other regions.
“We intend to be the partner of choice for final-mile logistics entrepreneurs seeking growth capital or an opportunity to transition their businesses,” said Benko. “We have a shared vision to build an industry-transforming final-mile logistics platform that creates opportunities for our employees, customers and contract drivers.”
The combined company will be entering a final-mile delivery space rife with competition. Capital Express and ADL Delivery will go toe-to-toe with major players including ArcBest, BrightDrop, UPS’ Roadie and Select Express Logistics, which was recently acquired by global logistics powerhouse AIT Worldwide.
Each of those companies has spent years building out a robust final-mile network capable of spanning the U.S., and the new holding company will need to play catch-up to compete with that kind of presence. The good news? It’s already off to a promising start with a strong network in the Midwest and Southeast.
“We are thrilled with the prospects of combining the Capital Express and ADL Delivery networks and customer bases and view this as the first of many key growth initiatives in developing a leading final-mile logistics provider,” a bullish O’Hara predicted.
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The FREIGHTWAVES TOP 500 For-Hire Carriers list includes UPS (No. 2), XPO Logistics (No. 8) and ArcBest (No. 26).