Logistics M&A Activity – What’s Next?

The logistics environment is undergoing great change as 2015 goes down as one of the most active for m&a activity in recent years. Last week, Logistics Trends & Insights hosted a Twitter chat relating to this topic.

 Panelists were:

  • Chris Saynor, CEO of EFT
  • Eric Johnson, Research and IT Director of American Shipper
  • Jim Bisaha, President of Logistics Trends
  • Moderator – Cathy Morrow Roberson, Head of Logistics Trends & Insights

The actual conversation can be viewed at #LogisticsMA but an overview is provided here.

Logistics mergers and activity is up this year thanks in part to a buildup of liquidity and cheap money. While there has always been willing buyers there has not necessarily been willing sellers until now.

Any company seems to be fair game but it was agreed that those companies that have a strong customer base, provide great service and are profitable appear to be the most likely candidates. Many iconic names have recently disappeared such as Norbert Dentressangle in Europe and OHL, Pacer and now Con-way/Menlo. In terms of regions, the US, Europe and Asia are the top areas for expansion.

The conversation turned to XPO Logistics which seems to be leading the logistics industry in the number of acquisitions. Eric Johnson noted that the company from envisioning a brokerage rollup to realizing the real play is building a business to rival FedEx and UPS. All panelists expect XPO to target Asia next but as Chris Saynor stated, “when an opportunity is there, they take it”.

However, with all of its acquisitions made in such a short time, the question of integration and culture came up. Eric Johnson suggested that the real focus is on cross-selling rather than true integration while Chris Saynor observed that good people matter more than integrating different company cultures. However, Jim Bisaha and Cathy Morrow Roberson cautioned that culture is extremely important. Both Bisaha and Roberson have been involved in integrating acquisitions while at UPS and commented on the importance of integration.

Finally, what’s next? All panelists agree that mergers and acquisitions activity will likely continue into 2016 – Possible consolidation in freight forwarding and last mile-delivery may occur. Consolidation in the US will also likely continue with still a number of desirable companies potentially up for grabs. “The big will get bigger.” Chris Saynor made a bold prediction that C.H. Robinson will make an acquisition and Geodis could supplement its OHL buy. It does seem likely that C.H. Robinson, the largest US truck broker, will make an acquisition. It acquired FreightQuote in early 2015 but it has also been expanding its reach in Europe. Meanwhile, French-based Geodis has been open about its desire to expand globally while DSV has expressed its desire to acquire a US company (Talks with UTI failed in 2014).

Consolidation is in the air and will remain so as the logistics market becomes less fragmented. In addition, consolidation is also expected within the ocean and air markets as well as logistics start-ups. An interesting time to be involved in logistics, what’s next?

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