One of the leading providers of integrated logistics and transportation solutions, Ryder System Inc. (R) has is re-launched its Dedicated Contract Carriage segment. The segment will now be known as Ryder Dedicated.
Dedicated Contract Carriage accounted for approximately 10% of Ryder’s business. The business provided equipment, maintenance and administrative services of a full service lease with drivers and additional services.
The additional services include route planning and scheduling, fleet sizing, safety, regulatory compliance, risk management and technology and communication systems support. It also includes on-board computers and other technical support. However, in 2012, the segment was merged with Ryder’s Supply Chain Solutions following a restructuring of the internal reporting system.
In addition to re-branding, Ryder has complemented its Dedicated business with Transportation Management services. This new integrated solution will help reduce empty miles and lower transportation expenditures for customers.
Apart from segmental restructuring, the company is taking several other strategic developments under its wings. Ryder continues to invest in commercial rental and leased vehicles. In addition, the company also invests in maintenance technology as well as sales and information technology.
However, we remain concerned about the challenging economic environment surrounding its operations. Further, heavy capital expenditures, tighter truckload capacity and competition are expected to create significant headwinds for the company.
The stock retains a Zacks Rank #2 (Buy).
Among the other related companies, we believe TAL International Group, Inc. (TAL), American Railcar Industries, Inc. (ARII) with a Zacks Rank #1 (Strong Buy) and Air Lease Corporation (AL) with a Zacks Rank #2 (Buy) are worth considering.
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