Streamlining Strategy Continues with Sale of Coyote Logistics

  • UPS sells Coyote Logistics to RXO for $1.025 billion
  • Deal advances UPS CEO Carol Tomé’s strategy of streamlining the company’s structure
  • Coyote Logistics generated $3.2 billion in revenue in 2023 with a $470 million gross margin and $86 million adjusted EBITDA
  • Acquisition makes RXO the third-largest broker in the US
  • UPS has been shedding less profitable operations since 2020

United Parcel Service (UPS) has sold its freight-brokerage business, Coyote Logistics, to rival RXO for $1.025 billion as part of CEO Carol Tomé’s strategy to streamline the company’s structure and focus on core operations. The sale comes after UPS shed less profitable businesses like its UPS Freight unit in 2021. Coyote Logistics generated $3.2 billion in revenue with a $470 million gross margin and $86 million of adjusted EBITDA in 2023. RXO’s acquisition will make it the third-largest broker in the US.

Factuality Level: 8
Factuality Justification: The article provides accurate information about UPS selling its freight-brokerage business Coyote Logistics to RXO for $1.025 billion and explains the reasoning behind this decision as part of CEO Carol Tomé’s strategy to streamline the company’s structure by focusing on its core business. It also includes relevant background information about UPS’s previous acquisitions and the current state of freight brokerage activity. The article is written in a clear and objective manner without any significant bias or misleading information.
Noise Level: 6
Noise Justification: The article provides relevant information about UPS selling its freight-brokerage business to streamline its structure and focuses on the company’s strategy under CEO Carol Tomé. However, it lacks in-depth analysis or exploration of long-term trends or consequences of decisions. It also does not offer significant actionable insights for readers.
Public Companies: United Parcel Service (UPS), C.H. Robinson Worldwide (CHRW), Total Quality Logistics (null), TFI International (null)
Private Companies: RXO
Key People: Carol Tomé (CEO of United Parcel Service), Drew Wilkerson (Chief Executive of RXO)

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Financial Relevance: Yes
Financial Markets Impacted: UPS and RXO stocks, freight brokerage industry
Financial Rating Justification: The article discusses the sale of Coyote Logistics by UPS to RXO, which impacts both companies’ structures and the freight brokerage industry. It also mentions the financial aspects of the acquisition, such as revenue and profit margins.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article. The focus is on United Parcel Service selling its freight-brokerage business to streamline its structure, which has a minor impact on the company’s operations.

Reported publicly: www.wsj.com