Fleet Management

Logistics M+A Boom Echoes into New Year

January 07, 2016

By David Cullen

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Image via Eyefortransport
Image via Eyefortransport

With 2015 winding up as a boom year for mergers and acquisitions in the logistics industry, a new report reveals that nearly 48% of shippers regard M+A activity in logistics as a positive and just over 39% embrace the M+A frenzy because they prefer full-service logistics providers that offer a wider geographical reach.

That’s per the latest bi-yearly Hot Trends outlook issued by eft Supply Chain and Logistics Business Intelligence, a unit of U.K-based Eyefortransport Ltd.  

The report, based on the firm’s industry knowledge as well as the opinions of 300 supply chain and logistics executives, also found that over 60% of those surveyed currently use or will use predictive analytics by 2018.

In addition, almost 69% of the respondents “think millennials will change the way consumers buy, which will in turn affect how supply chains are managed.”

Logistics service providers, for the most part, are as upbeat about the M+A activity as shippers. “Most logistics providers [45.5%] stated that the consolidation taking place was helpful, as it was making sense of a fragmented industry.”

But 22.73% of the LSP respondents were “concerned about the heated M+A activity, suggesting this was going to increase competition in the logistics space. A further 12.73% of respondents said they were looking to make acquisitions to better position themselves in light of other M+A moves.

The report’s author, Haley Garner, head of Research and Content, pointed out the firm is currently “seeing some major consolidation taking place in the shipping industry and can expect to see further moves as logistics providers look to take advantage of eCommerce, cross-border trade and shifting global demand. While 45.45% of respondents were comfortable with the M+A activity, and a further 13.6% had been acquired or were looking to be acquired, it is the 40.91% concerned respondents that stands out in the survey.

“It seems that LSPs are stuck between satisfactions with their current position in the industry, and alarmed at these recent developments,” he continued. “Time will tell which business are in a better position moving forward.”

Garner noted that when it comes to the 40.91% with concerns, “what we can say is there will be a percentage whose reaction is due to some form of response lag to current business trends as well as a percentage who are proactively responding to the changing business environment of logistics services.”

“The M+A activity in the logistics space is likely to continue into 2016,” he concluded. “Shippers indicated that this was something they preferred given the rise of the ‘full-service’ logistics provider. From the logistics perspective, there is a certain degree of nerves with many providers looking to counter what their peers have done in terms of inorganic growth.”

The full Q1 2016 Hot Trends in Supply Chain and Logistics Report can be downloaded.

Comments

  1. 1. dylan [ January 08, 2016 @ 06:45AM ]

    what the heck is M+A? It's never defined???

 

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