On June 23, UPS announced its plans to sell its leading global third-party logistics (3PL) provider, Coyote Logistics, to RXO. Less than a decade after acquiring the brand, UPS has agreed to sell it at a $775 million loss.

In today's blog post, we'll discuss what Coyote Logistics is, what the sale means for UPS (and for you), and how your business can adopt UPS's philosophy to fuel business growth.

What is Coyote Logistics?

For over 15 years, Coyote Logistics has connected customers with full truckload, less than truckload (LTL), intermodal, and other capacity or asset solutions in the third-party logistics space. As a freight broker, the company doesn't own any trucks itself. Instead, it aggregates demand from shippers and supply from truckers to help products get where they need to go and reduce wasted space in trucks.

The Chicago-based Coyote Logistics works with 100,000 network carriers and manages 10,000 loads per day, matching domestic and international shipments to keep the supply chain moving.

In 2015, UPS acquired Coyote Logistics for $1.8 billion.

This month, UPS announced plans to sell the logistics brand to RXO, a prominent player in the logistics industry, for $1.025 billion. According to a release by RXO, the purchase will enhance the technology-enabled brokerage company's market position, making it the "third-largest provider of brokered transportation in North America."

UPS's loss is RXO's gain.

Why did UPS sell Coyote Logistics?

In the carrier's press release, UPS Chief Executive Officer Carol B. Tomé explained the sale, saying, "As UPS positions itself to become the premium small package provider and logistics partner in the world, the decision to sell our Coyote Logistics business allows an even greater focus on our core business."

Earlier this year, Tomé stated in an earnings call that UPS's Supply Chain Solutions business was down $3 billion year-over-year— one-third of the total company decline. Of that $3 billion, Coyote made up 38% of the decline for the year and 48% of the fourth quarter decline.

These statistics led Tomé to posit in January that Coyote may be worth more to someone else than it is to UPS. And, if all goes to plan— it appears she was right. The sale should be finalized by the end of the year.

Does your shipping plan allow you to focus on your core business?

Confirming on-time delivery. Tracking down refunds. Negotiating rates.

Shipping can feel like a full-time job if you're not careful.

UPS is making moves to focus on its core business. Are you doing the same?

ShipRx's core focus is to help you save money on shipping through parcel audits and parcel rate negotiations. When you choose to partner with ShipRx, we'll help you spend less time and money on shipping to give you more time and resources to spend on your core business.

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