Mergers and Acquisitions on the Increase in the Transport and Logistics Sector

PwC suggests economic recovery is whetting multinationals’ appetite to purchase independent freight forwarders.

 

The mergers and acquisitions (M&A) in the transport and logistics industry is set to increase in the second half of the year according to a report from Price Waterhouse Coopers (PwC). Economic recovery and the need to branch out into new markets are pushing the biggest companies to integrate operators and independent freight forwarders are their main focus. But there is another alternative: cooperation between freight forwarders.

We saw less M&A in the first 6 months of the year, just like at the end of 2014 but the value of transactions has increased. The mega-operations (above 1,000 million US dollars) now account for 55% of the total, although the scenario is changing. Until recently, North America and Europe were leading major integrations in the freight sector, but they have now lost ground to Asia and Oceania. The operators in emerging markets like China are buying companies to increase their volume, efficiency and coverage.

According to the PwC report most of the M&A are focussed on land transport, because this is the area of the market with the highest level of fragmentation. In contrast, in air or sea transport, there are very few independent companies that can be purchased.

In the second half of 2015, M&A will accelerate thanks to economic recovery and momentum from China and the United States as the strength of the dollar is facilitating the purchase of foreign companies. Independent freight forwarders will continue to be a focus point for the multinationals according to Jonathan Kletzel and Julian Smith, who created the PwC report: "As the industry seeks greater efficiency (…), these smaller companies are prime targets for the larger players."

What can small and medium forwarders who don’t want to lose their independence do? Sarah Bidmead, Network Manager at Pangea Logistics Network, offers these recommendations:

  1. Invest in a strong corporate image that includes good online positioning.
  2. Find similar agents to work with in other countries and gain access to opportunities with international clients.
  3. Use online tools to make it easier to work with global customers, for example e-payment platforms, shipment tracking, etc.
  4. Convey the advantages of being an independent freight forwarder: close relationship with the customer, personalised service, flexible prices, etc.
  5. Expand the catalogue of services and destinations, together with other companies and present customers with a complete portfolio.

"Pangea Logistics Networks is a global network of independent freight forwarders that was created to promote cooperation among its members around the world in a bid to compete with the big multinationals", adds Sarah Bidmead. "Our network is made up of 400 local offices in 98 countries, allowing us to offer a comprehensive service to our customers in all areas related to transport and destinations, without our members having to give up their independence."

More information available at www.pangea-network.com

 

About Pangea Logistics Network

Based in London, Pangea Logistics Network is an International Freight Network of First Class independent Freight Forwarders with over 420 local offices in more than 95 countries. Our aim is to promote collaboration between Member Companies in order to gain competitiveness on the present market. We handle 1,5 million shipments every year for 60,000 potential customers, making a total annual turnover of 2 billion USD. 

 

Press Contact

Sarah Bidmead

Network Manager

s.bidmead@pangea-network.com   

+44 (0) 1277.800.047

 

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