Less than a decade ago Swift Transportation, Knight Transportation, AAA Cooper and U.S. Xpress were individual companies, and each were among the top 50 for hire-carriers on CCJ's Top 250 rankings.
Trucking giants Swift Transportation (then no. 4) and Knight (then no. 24) in 2017 announced they would merge. Four years later the now-combined Knight-Swift acquired Dothan, Alabama-based less-than-truckload carrier AAA Cooper Transportation (no. 49), and this week said it plans to acquire Chattanooga truckload rival U.S. Xpress (no. 19).
Among the many comments posted on CCJ's social media pages from readers of Monday's news centered around Knight-Swift's growth – already among the largest truckload carriers in the country – and that ingesting Chattanooga-based U.S. Xpress would create a truckload monopoly.
In its most basic sense, the Federal Trade Commission defines a monopoly as a market structure that favors a single company, with its goods and/or services dominating the market at all times. While Knight-Swift and its soon-to-be 25,000 truckload tractors will be a giant of the highways, it makes up only a fraction – less than 1% – of the more than 4 million Class 8 trucks registered in the U.S.
"There is near zero – and I mean close to absolute zero – chance this deal would be stopped due to monopoly concerns," said Jason Miller, associate professor of supply chain management and interim chair of the Department of Supply Chain Management at Michigan State University's Broad College of Business.
While the carrier that comes through the other side once the deal closes later this year will be of significant size, Donald Broughton, managing partner and principal at Broughton Capital, LLC, said the Knight-Swift-U.S. Xpress conglomerate still wouldn't be big enough to dictate market pricing, "and therefore it fails one of the foremost basic tests of 'Is this approaching monopolistic?'"
In its most basic sense, the Federal Trade Commission defines a monopoly as a market structure that favors a single company, with its goods and/or services dominating the market at all times. While the Knight-Swift and its soon-to-be 25,000 truckload tractors will be a giant of the highways, it makes up only a fraction – less than 1% – of the more than 4 million Class 8 trucks registered in the U.S.
Spencer Tenney, president & CEO of Tenney Group, a mergers and acquisitions firm that works with business owners in the 3PL, trucking and bus industry, noted the Kinght-Swift/U.S. Xpress deal would affect the competitive landscape, "but competition would still remain very meaningful," he said. "It would not allow Knight-Swift to dictate pricing and conditions. That alone makes characterizing this possible transaction as a potential monopoly a serious stretch from my vantage point."
