Newgistics buys LMI to offer LTL shipping

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Newgistics is set to announce today the acquisition of Logistics Management Inc., a provider of transportation brokerage services optimized for less-than-truckload shipping.

The returns management services provider will use LMI's transportation management capabilities to expand the set of services offered beyond the company's traditional returns management business.

"Many small and mid-sized companies do not have cost-effective options for LTL shipping; however, with our acquisition of LMI, Newgistics will be positioned to offer our customers a streamlined, centralized solution that combines the proven technology of Newgistics' SmartLabel with LMI's inbound and outbound LTL transportation management capabilities," said Bill Razzouk, CEO of Newgistics, Austin, TX, in a telephone interview last week. Terms of the all-cash deal were not provided.

Incorporated in 1982, Fairhaven, MA-based LMI provides freight-cost containment services to manufacturers, distributors and associations. Hundreds of companies benefit from contractual freight rates with quality national and regional less-than-truckload and truckload carriers, efficient and accurate freight bill audit and payment services, convenient Web-based rating and reporting tools, and the transportation expertise of our highly trained staff.

Both Newgistics and LMI have about 54 employees.

"Our customers use a lot of LTL to move product in and out of distribution centers, not just return products," he said. "We think we have a good shot at capturing some of that business from LMI. That is part of our growth strategy."

Mr. Razzouk also said that Newgistics is planning to invest more money into LMI to expand its business development activities. He also said the LMI acquisition sets Newsgistics up to offer - in the future - additional services that would pertain to how its retail clients' customers receive their orders from the retailers.

"We are going to look at the forward, home delivery part of the order," he said. "This is a building block to get us there."

In addition to unifying returns with LMI's LTL transportation management offering, Mr. Razzouck said the combined entity offers reduced handling costs, along with efficient and accurate freight bill audits and payment services, convenient Web-based rating and enhanced transportation reporting tools. The services are optimized for retailers, distributors, manufacturers and third-party logistics providers that ship LTL freight.

Newgistics' SmartLabel provides customers with a pre-addressed, pre-paid bar-coded label that can be affixed to the return package and can be dropped off anywhere in the U.S. Postal Service mail stream, including customers' homes or offices. Through SmartLabel, Newgistics provides companies with real-time intelligence on the status and location of each package.

Newgistics' SmartLabel customers include Neiman Marcus, J. Crew and Abercrombie & Fitch.

In general, Mr. Razzouk said LTL, which offers expedited freight moves, is a growing area.

"LTL is an over $100 billion business in the United States and for ground transportation the fastest growing mode, so it represents a great opportunity," he said.

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