Did anybody read the Q&A portion of their earnings call? About half way down one of the analyst ask the magic question about acquisitions going forward. Ups answer was they were in an active process. Read it yourself. Seeking alpha ups earnings call. I just can't get the cut and paste.
"Ben Hartford
Just wondering what your point of view is today on the acquisition environment as you start to lap the Coyote acquisition. Obviously taking into account what you've said historically about acquisition criteria, are there specific segments or verticals that you're more interested in?
And I guess I'm leading you into UPS Freight in particular given some of the softness that we see in that LTL market. Do you think that business is a sufficient scale today or are there potential acquisition opportunities in that segment specifically? Thanks.
David Abney
And I will answer the first part and then you talked a little bit about Coyote so I will ask Alan to briefly hit that and then the LTL environment and Myron will take that. From an acquisition standpoint we have an active process and we're really looking in what I will call just three general buckets that we're always taking a look at. First is new opportunities, new opportunities that would help us to add more value to our customers. And then anytime that we can expand capability within our network, so if it's something that we don't feel as strong about as we'd like to then that would be that second criteria.
And then third, the trade lanes are shifting throughout the world and so geographic presence is always important. Over the last few years the emerging markets has been a place that we've put a lot of attention on.
So adjacent markets which is what we did with the Coyote acquisition, is key on our mind. But at the end of the day whether it's organic growth or its inorganic growth our focus is on growing this business and at the same time having profitable returns. So, from a Coyote standpoint, Alan?
Alan Gershenhorn
Just a quick update on Coyote, certainly their customers and our customers and new customers are responding very well to the new Coyote and UPS combined value prop. For the quarter we continue to see strong year-over-year growth in loads and our gross margin has also expanded for the quarter. As I think we all know the truckload market remained soft but certainly this asset-light model has provided some great flexibility in the up-and-down cycles.
And then just lastly, I will say that as far as the synergies related to the acquisition we're seeing some good work happening there in procurement, asset utilization, cross-selling and then organizational synergies that are benefiting both Coyote and also our U.S. Domestic and Supply Chain & Freight segments and we're on track. And I guess I will turn it over to Myron to talk a little bit about the LTL.
Myron Gray
Ben, as you are well aware the LTL market for the last 16 consecutive months has experienced softness. And our customer base is telling us that they have high inventory levels. In addition to that with high inventory levels the opportunity for restocking is soft as well. All those things considered, we believe that we have the appropriate scale at UPS Freight. We will have and continue to monitor the market and make the appropriate adjustments and make the right business decisions moving forward in terms of whether or not to expand our scale. Thank you."
There you go. I wish the best for YRCW and ABF but no matter how cheap UPS could buy either one WHY WOULD THEY? Only to have to pay BILLIONS to get out of the CSPF again?