UPS has announced that it will sell its Coyote Logistics division to RXO for just over $1 billion. This decision comes as UPS aims to focus more on its core package-delivery business. The sale is expected to be completed by the end of the year, pending regulatory approval.
UPS CEO Carol Tome stated that selling Coyote Logistics will allow the company to concentrate even more on its core operations. Freight brokers like Coyote Logistics act as intermediaries between shippers and carriers, such as UPS. RXO, based in Charlotte, North Carolina, expects the acquisition of Coyote to nearly double its revenue to $7.1 billion annually, making it the third-largest freight broker in North America.
Coyote’s network has grown significantly since UPS purchased it in 2015 for $1.8 billion from private-equity firm Warburg Pincus. Its current network works with 100,000 carriers and manages 10,000 loads per day. Once the sale is finalized, UPS will update its financial outlook accordingly. This move reflects UPS’s strategic shift towards streamlining its business operations and focusing on its core package-delivery services.
