Industry News

Consolidation in the Transportation Industry

Consolidation in the Transportation Industry

Excerpt from: KC Smart Port | By: Morgan Bell | September 01 2015

Transportation and logistics companies are looking to quickly grow in new markets and for new services to meet customer demands. It’s a race to meet service and quality demands set by the consumers. The industry continues to become more fast-paced as logistics and transportation mergers and acquisitions increase.UPS recently announced a $1.8 billion acquisition of Coyote Logistics. Coyote Logistics is a non-asset-based transportation service provider, headquartered in Chicago. American Shipper reported that this acquisition is “UPS’ single largest acquisition and the largest deal ever for a pure freight brokerage.”
{Photo Source: Depositphotos.com/khunaspix}

Depositphotos_khunaspixThe Journal of Commerce reported the UPS offer for Coyote Logistics followed XPO Logistics’ $3.5 billion purchase of France’s Norbert Dentressangle, Kuehne+Nagel’s acquisition of Memphis-based multimodal logistics company ReTrans, French Logistics company Geodis’ acquisition of U.S. based OHL for a rumored $800 million, and FedEx’s pending $4.8 billion bid for the ground operations of Dutch transport operator TNT Express. “The UPS announcement with Coyote garnered a lot of attention,” said CC Capital Advisors managing director Bill Conway. “There is no shortage of deal flow when talking with smaller size transactions to middle market and low middle market transactions.”

Not only are mergers and acquisitions increasing, but value is increasing as well. According to the JOC, there were 61 announced logistics and transportation transactions worth $50 million or more in the second quarter. The value of those transactions is $34.4 billion, a 50 percent increase from the previous year.

In order to meet demand, logistics and transportation companies are looking for integrated solutions. PwC’s U.S. transportation and logistics leader Jonathan Kletzel said, “Cross-border and service-line expansion were key themes that drove the rationale for deals.”