RK Logistics joins wave of ‘tuck-in’ acquisitions to reach East Coast

March 5, 2024

Journal of Commerce by S&P Global

William B. Cassidy, Senior Editor | Feb 28, 2024, 9:13 AM EST 

A soft freight market is creating opportunities for accretive, or “tuck-in,” acquisitions of smaller trucking and brokerage companies as buyers seek means to expand territory and services and sellers seek capital and resources they need to survive and grow.  

California-based RK Logistics is the latest to make such a move, leaping across the country to acquire On Time Trucking, a small regional trucking company based in Farmingdale, NY, on Long Island.  

The deal, terms of which were not disclosed, gives RK Logistics a foothold in the New York City market and a direct reach extending into New Jersey and Connecticut.  

“Over the course of the last two years we’ve looked at well north of 100 acquisitions and On Time is the first one we’ve acted on,” Joe MacLean, chairman and CEO of RK Logistics, said in an interview this week. Finding the right purchase is “incredibly hard,” he said.  

That’s because privately owned RK Logistics isn’t a typical logistics service provider. The company’s roots are in Silicon Valley, and it has 40 years’ experience serving the semiconductor industry and what MacLean calls “innovation industries” producing high-tech, high-value goods.  

Those goods include batteries used to power electric vehicles (EVs). The logistics of EV battery manufacturing, shipping and storage is vastly different from managing the flow of shoes or automotive components and includes handling returns and recycling.  

“There’s a challenge in storing batteries because if there’s an incident with a lithium ion battery it typically makes national news,” MacLean said. “Batteries need to be serviced and then there is reverse logistics. And raw materials for batteries need to be stored.”  

On Time’s founder Daniel Leitgeb will continue leading the trucking company as president, ensuring continuity in customer service, MacLean said. “We’ll modernize the less customer-facing back office and create a company that is very scalable,” he said. “There’s a lot of opportunity in the tri-state area.”  

A widespread restructuring  

Freight-related companies are pursuing acquisition opportunities, both large and small, as the US economic picture stabilizes and improves. Among the larger recent deals is Hub Group’s $262 million purchase of Forward Air Final Mile in December.  

Other examples include Ohio-based Kenan Advantage Group’s acquisition this month of Northern Dry Bulk Carriers, a Michigan-based resin hauler. Nebraska-based ADL Final Mile also bought Sonic Systems, a final-mile logistics firm in Florida, this month.  

Although these deals don’t generate headlines similar to the $1.1 billion acquisition of Daseke by TFI International in December, they’re part of a widespread, behind-the scenes restructuring of transportation networks directly aimed at attracting shippers.  

RK Logistics’ high-tech clients are on the move, and that’s pushing the logistics provider to follow. “We used to be exclusively an East [San Francisco] Bay company, but now we’re moving eastward with our customers” and the spread of EV technology, MacLean said. 

RK Logistics expanded further east last year, opening distribution facilities and offices in Texas, Michigan and Arizona. “The next logical place to go was the East Coast,” MacLean said. “We had significant interest from customers who wanted support on the East Coast.”  

The New York City area is a key market for electric vehicles and supporting EV technologies, he said. The city wants all for-hire taxis and rideshare cars — more than 100,000 vehicles — to be EVs by 2030. That’s in addition to vehicles in the city’s fleet.  

On Time, which has a terminal on Long Island and specializes in delivering bulky less than-truckload goods, operates with team drivers in New York City’s five boroughs.  

Contact William B. Cassidy at bill.cassidy@spglobal.com.  


Recent Posts