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Forward Air Is Just Forward Now

Forward Air (NASDAQ: FRWD) wants to be known as more than a trucking company that moves airfreight by ground.

Benzinga · 02/06/2020 16:17

Forward Air (NASDAQ: FRWD) wants to be known as more than a trucking company that moves airfreight by ground.

Through a series of acquisitions the past five years, the Greeneville, Tennessee, motor carrier has expanded into the intermodal drayage, final-mile delivery and expedited truckload modes.

To better draw that connection for existing and potential customers, the company is rebranding itself as Forward.

"We don't want people to put us in a box that says, ‘Oh, they just do air,' because it's not the case. We have the ability now to really provide a more robust solution for the overall supply chain," Lance Small, senior vice president of field sales, said in an interview at the Air Cargo 2020 conference here last week.

Forward, which had a booth in the exhibit hall, used the event for a soft rollout of its new marketing strategy. The company's legal name will remain Forward Air.

For almost 29 years, Forward's core business has been scheduled and expedited less-than-truckload service for airlines, all-cargo carriers and freight forwarders. With terminals on or near airports, it runs an airport-to-airport linehaul system that offers customers a cheaper, and sometimes faster, alternative for moving shipments booked to move by air.

The 2014 acquisition of Central States Trucking gave Forward entry to the container and intermodal drayage market, primarily in the Midwest. In 2015, Forward bought out its largest competitor, Towne Air Freight, which had a dedicated final-mile operation that specialized in so-called "through-the-threshold" home delivery and installation of appliances and furniture for manufacturers, retailers and e-commerce companies. Last March, it bought final-mile provider FSA Logistix and in December it purchased Linn Star Holdings, which provided in-home delivery and set up in the Midwest and Southwest.

Over the years, Forward has also added a full truckload service that operates out of the same terminals as the LTL network and an airline logistics program. As a multiservice logistics provider, Forward also offers refrigerated or flatbed truck options, container freight stations for ocean consolidation and customs clearance, warehousing, and freight management.

"Our model is really bringing the precision execution we've developed over the years on the airfreight side to those other business and service verticals," Small said. Extending those processes across the company allows Forward "to really reduce costs and provide an integrated solution" that can help customers expand their markets.

Forward's customer base now includes international freight forwarders and third-party logistics providers, in addition to domestic truck brokers and air carriers.

Small said the comprehensiveness of Forward's expedited network sets the company apart in being able to consistently make on-time deliveries nationwide. The carrier, which uses owner-operators to run its fleet, has more than 90 facilities at or near major U.S. and Canadian airports, 12 regional sort centers, and 300 secondary airports that are reached through pickup and delivery services.

"Some might be able to match it in a pocket here or a pocket there," but not across their entire system, he said.

Forward announces its earnings Thursday. In 2018, it grew revenue 13% to $1.3 billion and operating income by 5.5% to $92 million. In the third quarter of 2019, Forward reported flat net income, and a 2.7% increase in operating income on 9% growth in revenue to $361.7 million.

The company is on a tear over the last decade, with double digit growth rates in revenue, earnings before interest and taxes, EBITDA, and earnings per share.

Image Sourced from Pixabay