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>UPS Freight generated approximately US$3 billion in revenue in 2020 and was approximately breakeven from an operating income perspective. 800mm for that kind

• cpitman 6y ago
  It looks like the value of this business unit has dropped though, UPS acquired their LTL operation for $1.2 billion in 2005. Maybe they just about broke even with the operating profit?
  • tgtweak 6y ago
    They essentially operated it at cost with themselves as the main client. As is often the case with internal business units operating as cost centers and not forced to be externally competitive, they attrition over time and become less attractive vs external alternatives which competed and improved over the same time. I suspect this is the case here and after 15 years they calculated it would be more efficient to have it run externally. UPS already uses TFI for a lot of these needs and the deal sees them continue to do so for the next 5 years. It's not uncommon for businesses who own their building to sell the building to a real estate company and lease it from them when they can better allocate that capital for growth.
• selectodude 6y ago
  It is. And the business will be wound down and the excess business integrated into current capacity by the purchaser. Kind of a win/win in that way.
• tyingq 6y ago
  It may have been a good deal to the buyer as well. Assuming UPS put little effort into making it profitable (likely), there's little risk and lots of potential upside in 3B/year breakeven.