UPS to Sell UPS Freight to TFI International Inc.
According to a company , United Parcel Service Inc. has entered into an agreement to sell UPS Freight to TFI International INC for $800 million. The agreement, subject to working capital and other adjustments, is expected to close during the second quarter of 2021 and includes UPS less-than-truckload (LTL) and full-truckload (FT) businesses.
UPS and TFI International also plan to enter into an agreement for UPS Freight to continue to utilize UPS’ domestic package network to fulfil shipments, for a period of five years.
“We’re excited about the future and the opportunities this creates for both UPS and UPS Freight as part of TFI International Inc.,” said UPS Chief Executive Officer Carol Tomé. “The agreement allows UPS to be even more laser-focused on the core parts of our business that drive the greatest value for our customers.”
Headquartered in Richmond, VA, UPS Freight has been in operation for over 85 years and is one of the largest LTL carriers in the U.S., with 2019 revenue of $74 billion. With over 500,000 employees, the company embraces a strategy a simple strategy: Customer First. People Led. Innovation Driven. The company services customers in more than 220 countries and territories and offers a broad range of integrated logistics solutions, including regional and long-haul services.
The statement says the decision to sell UPS Freight was reached following a thorough evaluation of the UPS portfolio and aligns with the company’s “better, not bigger” strategic positioning.
UPS expects to recognize a non-cash, pre-tax impairment charge of approximately $500 million on its statement of consolidated income for the year ended December 31, 2020. The deal remains subject to customary closing conditions and regulatory approvals.
King & Spalding LLP, whose deal team is comprised of Rahul Patel, John Hyman, Tim FitzSimons, Josh Kamin and Tom Knox is serving as legal advisor on the matter. Goldman Sachs & Co. LLC is serving as financial advisor.
Suez Canal expansion plans greenlit by Egyptian president
The Suez Canal is to undergo a two-year expansion project, following the weeklong closure of the channel by the stranded Ever Given container ship in March.
Plans set forth to expand narrow sections of the Suez Canal have been greenlit by the Egyptian president to safeguard against future blockages.
Dredgers will widen and deepen the single-lane stretch close to the southern mouth of the canal, near where the 400m container ship got wedged earlier this year, while a second lane opened in 2015 will be extended to promote two-way traffic and alleviate the impact of bottlenecks.
President Abdel Fattah al-Sisi gave the order to “immediately start implementing the proposed development plan and put in place a timetable for completion as soon as possible”, according to reports. It is understood he expects the work to be fully completed within two years.
Ever Given negotiations rage on
The Ever Given left hundreds of ships stranded and disrupted an estimated $9.5bn in goods each day when it became wedged across a narrow passage of the trade route in March. After a week of dredging, towing and manoeuvring, it was eventually freed from the banks of the Suez Canal in the early hours of 29 March and set course of the Bitter Lakes holding area.
There the vessel, its crew and its cargo have remained ever since, while legal action between Egyptian authorities and the ship’s owners rages on, though SCA chairman and Managing Director, Admiral Osama Rabie, refutes allegations that crew have been detained.
“[There] is no truth in the allegations of detaining the ship crew, pointing to that the SCA does not mind the departure or recrew operations provided the presence of the sufficient number of sailors to secure the vessel and in the light of the presence of the ship captain as he stands as the juridical guardian of the ship and the cargo aboard,” Rabie said in a statement.
The SCA initially sought $916m in compensation to cover refloatation costs, including repairs where the channel was damaged to move the vessel, bonuses for the rescue crews who worked throughout the jam, and a package for “loss of reputation”.
Now the SCA and its chairman and Managing Director, Admiral Osama Rabie, have agreed to reduce the bill by a third. The authority has reportedly offered payment terms for the $600m to the Ever Given’s owner Shoei Kisen. Shoei Kisen has also declared a general average on the goods on board, with shippers liable to shoulder a significant outlay to get the 18,000-plus containers aboard to their final destination in the Nertherlands.