Jurupa Valley, Calif.-based DC Logistics LLC, an asset-based less-than-truckload (LTL) and warehousing services provider, announced this week that it plans to acquireGLS US Freight Inc. and GLS US Solutions Inc., the U.S. freight divisions of the GLS Group, one of the largest parcel services providers in Europe.
A purchase price, for the transaction was not disclosed, but DC Logistics said it is expected to be completed by September 1 and is subject to customary closing conditions.
DC Logistics said that bringing GLS US Freight and GLS US Solutions into the fold aligns with its strategic vision to be what it called a Premier Powerhouse LTL carrier in the Southwest United States, further enhancing its commitment to delivering exceptional value.The company provides LTL and warehousing services in California, Arizona, and Nevada, as well as warehousing services in Oregon and Texas,
GLS US Freight provides United States-based LTL services, and GLS US Solutions provides freight brokerage services.
“We are thrilled to welcome GLS US Freight and GLS US Solutions onto our team,” said Judas Castro, CEO of DC Logistics, in a statement. “This is a significant step to accelerate our journey to become a Top 20 LTL Carrier in the United States and will enhance our value proposition to customers while positioning our company and our employees for new levels of success. We intend to revive the Mountain Valley Express brand known for its history of excellence in customer service.”
DC Logistics noted that GLS acquired Mountain Valley Express in 2019. In May 2021, it officially rebrandedit to GLS Freight, with the company saying at the time that it had steadily been integrating its freight operations with GLS’s parcel business into what it described as a growing network of hybrid facilities, providing its customers with scalable service offerings.
In an interview with LM, Castro, whom joined DC Logistics from Bonsai Capital in July 2022, where he served as Chief Executive, when Bonsai acquired DC Logistics, explained that at the onset of the pandemic in early 2020, Bonsai Capital started to raise funds with a focus on investing in the United States, specifically in the southwest.
“At the beginning, we were industry-agnostic and then started specializing more and more on logistics,” he said. “We looked at different trends, in terms of what we thought would grow, and that is where we decided to enter into the LTL sector, which is extremely difficult to start from zero. The second part is that it is very capital-intensive, and that scares away a lot of small investors, but not if you have a large investor with patient capital like ourselves. It also requires a degree of expertise that is not easy to find.”
Looking ahead, Castro said DC Logistics is on a clear path to future growth, especially going back to when Bonsai Capital acquired the company. And he added that DC Logistics was a family-run company when it acquired it. Since that time, he said he has been focused on moving DC Logistics from a family-run company to “institutionalizing” it, with the caveat that much more needs to be done.
“We are investing around $1 million per month on capex on things like renewing and growing the fleet, IT systems and IT architecture to scale up the company organically and inorganically,” he said. “You have to have new trucks in this industry and also the systems to scale up; otherwise, eventually you will fail. We also upgraded the network, opening some new terminals and closing some older ones. We also focused on bringing in the best people possible.”
Among these new people are: Matt Marshall, Senior VP of Sales, whom formerly ran 3PL operations for Yellow; James Ross, Chief Operating Officer, also from Yellow; and Jamie Roberts, Director of Pricing, whom formerly served at Senior Pricing Advisor for FedEx Services.
“We brought in a lot of expertise in operations, pricing, and sales, and with our systems ready and new trucks and processes in place, we are literally turning on the switch and ready to start scaling up,” he said. “We are extremely focused on service, which basically is what every carrier claims, but you really don’t know that without doing due diligence. I feel like we found a diamond in the rough and have done a lot of work on that diamond.”
What’s more, Castro said his vision for DC Logistics is to be a powerhouse in the southwest and to also leverage the burgeoning cross-border logistics activity between the U.S. and Mexico.
“We are going to focus on the southwest LTL market as the premier carrier,” he said. “And we are always going to be a company with a high level of service and with a cross-border focus. This is being done in stages, but before we wanted to attack Texas, we wanted to become bigger—and that is where the acquisition of GLS Freight is an extremely important milestone. It gives us size and makes us more relevant, because we are going to jump into the top 25 more or less, and strongly position ourselves for customers and go up against our competitors.”
As for reviving the Mountain Valley Express brand acquired from GLS, Castro said he sees a lot of potential in doing so, given Mountain Valley’s experience and reputation. Customers still recognize that brand, he said, adding that coupled with DC Logistics’ resources, he said there is a strong opportunity to be a leading southwestern U.S. LTL carrier.
Saadi Al-Soudani, Chief International Officer, GLS Group, said in a statement that this sale marks an exciting milestone for GLS, as it focuses on expanding its core U.S. domestic and international parcel offerings.
“The GLS commitment remains to provide its parcel customers with exceptional quality and service, as well as grow GLS US as a leading parcel delivery service provider in the American market,” said Al-Soudani.
GLS also operates through its wholly-owned subsidiaries in Canada and on the USA’s West Coast within its one GLS network. The company said that following the divestiture of its U.S. freight activities in the Southwest U.S., GLS will continue to be active in the American market through its core U.S. parcel activities that operate under General Logistics Systems US, Inc.
