Ryder System, Inc. (Ryder) is a leading provider of outsourced logistics and transportation services. The company provides supply chain, dedicated transportation, and commercial fleet management solutions.
Segments
The company operates through three segments: Fleet Management Solutions (FMS), which provides full service leasing that includes its contractual maintenance offering, commercial rental and maintenance services of trucks, tractors and trailers to customers principally in the United...
Ryder System, Inc. (Ryder) is a leading provider of outsourced logistics and transportation services. The company provides supply chain, dedicated transportation, and commercial fleet management solutions.
Segments
The company operates through three segments: Fleet Management Solutions (FMS), which provides full service leasing that includes its contractual maintenance offering, commercial rental and maintenance services of trucks, tractors and trailers to customers principally in the United States (U.S.) and Canada; Supply Chain Solutions (SCS), which provides fully integrated port-to-door logistics solutions, including distribution management, dedicated transportation, transportation management, freight brokerage, e-commerce fulfillment, last-mile delivery, contract packaging, and contract manufacturing in North America; and Dedicated Transportation Solutions (DTS), which provides turnkey transportation solutions in the U.S., including dedicated vehicles, professional drivers, management, and administrative support. Dedicated transportation services provided as part of an operationally integrated, multi-service supply chain solution to SCS customers are primarily reported in the SCS business segment.
In the beginning of 2022, the company announced its intention to exit its lower return FMS Europe (primarily United Kingdom (U.K.)) business. The company completed the shutdown of operations as well as the sale of the remaining vehicles and properties in 2023.
Strategy
The company’s strategy is to leverage secular trends that favor the decision to outsource logistics and transportation services, such as dynamic supply chains, labor constraints, supply chain disruptions, government regulations, e-commerce, and disruptive technologies; offering innovative products, solutions and support services to create and strengthen customer relationships.
Value Proposition
Through its FMS business, the company provides its customers with a variety of fleet solutions. By outsourcing these services to it, the company’s customers can focus on their core business. The company’s FMS product offering consist of full service leasing as well as leasing with flexible maintenance options; shorter-term commercial vehicle rental; contract or transactional maintenance services; digital and technology support services that optimize asset performance, compliance, safety; and comprehensive fuel services. In addition, the company provides its customers the ability to purchase a large selection of used trucks, tractors and trailers through its used vehicle sales facilities or through its digital channel. FMS also provides vehicles and maintenance, fuel and other services for vehicles used in its SCS and DTS businesses.
Operations
The U.S.: The company’s FMS customers in the U.S. range from small businesses to large national enterprises operating in a wide variety of industries, the most significant of which are transportation and warehousing, food and beverage, housing, business and personal services, and industrial. As of December 31, 2023, the company had 559 operating locations, excluding ancillary storage locations, in 49 states, the District of Columbia and Puerto Rico. The company’s operating locations serve multiple customers and have maintenance facilities that typically include a shop for preventive maintenance and repairs; a service island for fueling, safety inspections and preliminary maintenance checks; offices for sales and other personnel, and in many cases, a commercial rental vehicle counter. The company also operates on-site at 158 customer locations, which primarily provide vehicle maintenance solely for that customer's fleet.
Canada: As of December 31, 2023, the company had 28 operating locations throughout seven Canadian provinces. The company also operates 14 maintenance facilities on-site at customer properties in Canada.
FMS Product Offerings
ChoiceLease: The company’s lease offering, ChoiceLease, provides customers with vehicles, maintenance services, supplies, and related equipment necessary for operation of the vehicles while its customers furnish and supervise their own drivers and exercise control over the vehicles. The ChoiceLease offering allows customers to select the terms of their lease alongside the level of maintenance they prefer, from full service coverage to on-demand, or pay-as-you-go, maintenance.
For the year ended December 31, 2023, ChoiceLease revenue accounted for 54% of the company’s FMS total revenue.
Commercial Rental: The company offers rental vehicles to customers that have a need to supplement their private fleet of vehicles on a short-term basis (one day up to one year in length) to handle seasonal increases in their business or discrete projects. ChoiceLease customers also utilize the company’s commercial rental fleet to handle their peak or seasonal business needs, as substitute vehicles while their lease vehicles are undergoing maintenance, and while they are awaiting delivery of new lease vehicles. Although a portion of its commercial rental business is purely occasional in nature, the company focuses on building long-term relationships with customers so that it become their preferred source for commercial vehicle rentals. For the year ended December 31, 2023, commercial rental revenue accounted for 20% of the company’s FMS total revenue.
SelectCare: Through its SelectCare product, the company provides maintenance services to customers who choose not to lease some or all of their vehicles from it. The company’s SelectCare customers have the opportunity to utilize its extensive network of maintenance facilities and trained technicians to maintain the vehicles they own or lease from third parties. There are several bundles of services available to SelectCare customers including full service contract maintenance, preventive only maintenance and on-demand maintenance. Vehicles covered under this offering are typically serviced at the company’s own facilities.
The company may also offer its lease and maintenance customers additional maintenance and repair services, as needed, that are not included in contractual agreements, such as services when a customer damages a vehicle. In 2023, the company launched Torque by Ryder in select markets, a pay-as-you-go retail mobile maintenance solution and digital platform that enables all fleet owners and managers to order maintenance with an expert technician anytime, anywhere, with no long term contract.
For the year ended December 31, 2023, SelectCare revenue accounted for 12% of the company’s FMS total revenue.
Fuel Services: The company provides its FMS customers with access to diesel fuel at competitive prices at 415 of its maintenance facilities across the U.S. and Canada. The company also provides fuel services such as fuel planning, fuel tax reporting, centralized billing, fuel cards and fuel monitoring.
Used Vehicles: The company primarily sells its used vehicles from its 57 retail sales centers throughout the U.S. and Canada (12 of which are co-located at an FMS shop), at its branch locations and through its website at www.ryder.com/used-trucks. Typically, before the company offers used vehicles for sale, its technicians ensure that the vehicles are Ryder Certified, which means that they have passed a comprehensive, multi-point performance inspection based on specifications formulated through its maintenance program; Ryder DOT Verified, which are fully inspected to be compliant with Department of Transportation (DOT) standards with some wear and tear; or Ryder As-Is vehicles. The company has used vehicle inventory of 8,000 vehicles, in line with its long-term target range of 7,000-9,000.
FMS Business Strategy
The company’s FMS business strategy is to be the leading provider of fleet management outsourcing services for light, medium and heavy duty commercial vehicles.
Value Proposition
Through its SCS business, the company offers a broad range of innovative logistics management services that are designed to optimize customers' supply chain and address customers' key business requirements. The company’s business is organized by industry vertical (omnichannel retail (includes retail, technology, last mile and e-commerce), automotive, consumer packaged goods (CPG), and industrial and other (includes healthcare)) to enable its teams to focus on the specific needs of their customers. The company’s SCS product offerings provide port-to-door solutions including distribution management, dedicated transportation, transportation management, brokerage, e-commerce, and last mile. These offerings are supported by the company’s continued investments in a variety of information technology and engineering solutions that can be provided independently or as an integrated solution to optimize supply chain effectiveness.
SCS Product Offerings
Distribution Management: The company’s SCS business offers a wide range of services relating to a customer’s distribution operations, such as designing a customer’s distribution network; managing distribution facilities; coordinating warehousing and transportation for inbound and outbound material flows; handling import and export for international shipments; coordinating just-in-time replenishment of component parts to manufacturing plants and final assembly; and providing shipments to customer distribution centers or end customer delivery points, including support for e-commerce fulfillment networks. Additional value-added services, such as light assembly of components into defined units, packaging and refurbishment, are also offered to its customers. For the year ended December 31, 2023, distribution management solutions accounted for approximately 35% of the company’s SCS revenue.
Dedicated Transportation: Dedicated transportation services are offered as part of an integrated supply chain solution to the company’s customers with a high degree of specialization and a combination of outside carriers, equipment, professional drivers and dedicated services. As part of its dedicated transportation services, the company also offers routing and scheduling, fleet sizing, safety, regulatory compliance, risk management, technology and communication systems support including on-board computer and other technical support. These additional services allow the company’s customers to mitigate labor challenges associated with maintaining a private fleet of vehicles, such as driver recruitment and turnover, and government regulation, including hours of service regulations, DOT audits and workers' compensation. Dedicated transportation operations are located at the company’s customer facilities, and its dedicated offering utilizes and benefits from its extensive network of FMS facilities, which provides maintenance for all Ryder vehicles used in SCS solutions. For the year ended December 31, 2023, approximately 32% of its SCS revenue was related to dedicated transportation services.
Transportation Management and Brokerage: The company’s SCS business offers freight transportation, transportation management, and brokerage services relating to all aspects of a customer’s transportation network, including shipment optimization, load scheduling, and delivery confirmation through a series of technological and web-based solutions. The company’s transportation consultants focus on carrier procurement of all modes of transportation with an emphasis on truck-based transportation, and also includes rate negotiation, freight bill audits and payment services. In addition, the company’s SCS business provides customers with brokerage services designed to provide prequalified trucking capacity in North America.
E-commerce and Last Mile: The company’s e-commerce and last mile services offer omnichannel delivery with two-day delivery across the entire U.S. and one-day delivery across the majority of the U.S. The company’s e-commerce and last mile services are provided through a network of over 106 sites strategically located throughout the U.S. For its e-commerce customers, the company receives, picks, packs, and ships smaller items via parcel carriers to the end consumer’s home or through its carrier networks to its customer’s warehouse or retail stores. For its last mile customers, the company receives, assembles, and prepares big and bulky items through a third-party agent network for final delivery to the end consumer. Consumers can then choose from multiple levels of delivery services, including minor installation of the item and disposal of the replaced item. The company uses proprietary scheduling Ryder View 2.0 software for maximum efficiency that optimizes routes and allows customers to select their appointment time. For the year ended December 31, 2023, the company’s e-commerce and last mile services accounted for 19% of its SCS revenue.
Contract Packaging and Contract Manufacturing: On November 1, 2023, the company acquired all the outstanding equity of IFS Holdings, LLC, a holding company for Impact Fulfillment Services, LLC (IFS). IFS specializes in contract packaging, contract manufacturing and warehousing, for some of the largest and best-known consumer brands in the U.S., primarily in the consumer packaged goods, retail, and healthcare industries. The acquisition is included within the consumer packaged goods industry vertical in the company’s SCS business segment.
SCS Business Strategy
The company’s SCS business strategy is to offer its customers differentiated, functional execution and proactive solutions from its expertise in key industry verticals.
Dedicated Transportation Solutions
Value Proposition
Through its DTS business, the company combines equipment, maintenance, professional drivers, engineering, administrative services and additional services, including routing and scheduling, fleet sizing, safety, regulatory compliance, risk management, and technology and communication systems support to provide customers with a dedicated transportation solution that is designed to increase their competitive position, improve risk management and integrate their transportation needs with their overall supply chain. The company’s DTS solution offers a high degree of specialization to meet the needs of customers with sophisticated service requirements such as tight delivery windows, high-value or time-sensitive freight distribution, closed-loop distribution, multi-stop shipments, specialized equipment and integrated transportation needs.
Operations/Product Offerings
For the year ended December 31, 2023, the company’s DTS business accounted for 15% of its consolidated revenue. As of December 31, 2023, the company had 189 DTS customer accounts in the U.S. Because it is highly customized, the company’s DTS product is particularly attractive to companies that operate in industries that have time-sensitive deliveries or special handling requirements, as well as companies who require a highly engineered transportation solution with specialized services. DTS accounts typically operate in a limited geographic area, and, therefore, most of the professional drivers assigned to these accounts are short haul drivers, meaning they return home at the end of each work day, which helps with driver recruiting and retention.
In order to customize a DTS transportation solution for its customers, the company’s DTS logistics specialists perform a transportation analysis using advanced logistics planning and operating tools.
DTS Strategic Investment
On February 1, 2024, the company acquired all the outstanding equity of CLH Parent Corporation (Cardinal Logistics). Cardinal Logistics is a leading customized dedicated contract carrier in North America, providing dedicated fleets and professional drivers, as well as complementary freight brokerage services, last-mile delivery and contract logistics services. Cardinal Logistics primarily serves the consumer packaged goods, omnichannel retail, automotive, and industrial verticals.
DTS Business Strategy
The company’s DTS business strategy is to offer services to customers who need specific vehicles, specialized handling, dedicated capacity, or integrated transportation services.
Regulation
The company’s business is subject to regulation by various federal, state, local and foreign governmental entities. The DOT and various federal and state agencies exercise broad powers over certain aspects of its business, generally governing such activities as authorization to engage in motor carrier operations, safety and operations. The Federal Motor Carrier Safety Administration (FMCSA), under the DOT, manages a Compliance, Safety, Accountability initiative (CSA), partnering with state agencies designed to monitor and improve commercial vehicle motor safety, which uses roadside inspections and violations to measure motor carriers and drivers. The FMCSA also has regulations mandating electronic logging devices in commercial motor vehicles that impact various aspects of the company’s dedicated, supply chain and rental businesses.
The company is also subject to a variety of laws and regulations promulgated by national, state, provincial and local governments, including the U.S. Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA), which regulate safety, the management of hazardous materials, water discharges, air emissions, solid waste disposal and the release and cleanup of regulated substances, and the Food and Drug Administration (FDA) and United States Department of Agriculture (USDA), which regulate foodstuffs and other products for human consumption. In addition, the company must comply with licensing and other requirements imposed by the U.S. Department of Homeland Security and the U.S. Customs Service as a result of increased focus on homeland security and its Customs-Trade Partnership Against Terrorism certification.
History
Ryder System, Inc., a Florida corporation, was founded in 1933. The company was incorporated in 1955.
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