United Parcel Service (UPS) has sold its third-party logistics business to rival RXO (RXO) for $1 billion U.S.
The unit that UPS sold, Coyote Logistics, is a freight broker that aggregates demand from customers who need shipping and supply from truckers. RXO doesn’t operate any trucks.
UPS, which bought Coyote Logistics in 2015 for $1.8 billion U.S., incurred a loss on the sale.
Coyote generated sales of $3.2 billion U.S. in 2023 and grew its annual revenue by about 5% while UPS owned the company.
However, despite growing its sales, Coyote Logistics contributed less than 1% of UPS’ 2023 earnings.
The businesses and stocks of both UPS and RXO have struggled coming out of the Covid-19 pandemic as demand for shipping and logistics services has moderated worldwide.
The stock of UPS has fallen 21% over the last 12 months to trade at $136.60 U.S. per share.
RXO’s stock has declined 6% in the past year and currently trades at $20.21 U.S. a share.
