Skip to content
Search AI Powered

Latest Stories

newsworthy

Cash earmarked for logistics M&A sitting idle

In today's logistics M&A world, it's money, money everywhere, and not a place to put it, says BGSA exec.

In an environment of tight credit and ample yet reluctantly deployed liquidity, the logistics industry has a problem that other sectors wish they had: Too much money available for buy-outs and not enough places to put it.

Of an estimated $500 billion in cash in the hands of private equity investors, approximately 10 percent is earmarked for acquisitions in the logistics sector, according to estimates made this week by Palm Beach, Fla.-based BG Strategic Advisors (BGSA), a leading supply chain mergers and acquisitions (M&A) advisory firm. Benjamin Gordon, the firm's managing director, based his estimate on the oft-mentioned ratio of logistics historically accounting for 10 percent of the nation's gross domestic product.


Gordon added, however, that because so many logistics service providers have annualized growth rates exceeding the 10 percent threshold, the extrapolated amount of private equity capital allocated to the industry could be as much as $75 billion.

Gordon told the ninth annual eyefortransport 3PL Summit in Atlanta that the industry has a true supply-demand dilemma in that there is a lot of money chasing a relatively shallow reservoir of opportunity. Beyond the private equity sitting on the sidelines, there is an additional $2 trillion in cash resting on corporate balance sheets, according to Gordon.

"There is probably more money earmarked for the [logistics] space than can be absorbed," he said.

In recent years, the logistics industry has been a fertile breeding ground for M&A activity as providers beef up their global capabilities in response to shippers' winnowing their ranks of partners and looking to work with a select group of large partners that offer close to "one-stop shop" services.

According to Gordon, the top 50 providers today control about half the logistics market. In the early 1990s, the top 50 controlled about 20 percent of the total market, he said.

"We are in a period where the big keep getting bigger," he told the group.

Gordon said so-called non-asset based or "asset-light" providers continue to be seen as attractive targets because of their ample cash flows, their expertise and sizable customer bases, and their relatively low cost structures due to the absence of hard assets like planes, trucks, and ships that might weigh down their balance sheet valuations.

The Latest

More Stories

person using AI at a laptop

Gartner: GenAI set to impact procurement processes

Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.

Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.

Keep ReadingShow less

Featured

Report: SMEs hopeful ahead of holiday peak

Report: SMEs hopeful ahead of holiday peak

Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.

That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.

Keep ReadingShow less
retail store tech AI zebra

Retailers plan tech investments to stop theft and loss

Eight in 10 retail associates are concerned about the lack of technology deployed to spot safety threats or criminal activity on the job, according to a report from Zebra Technologies Corp.

That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.

Keep ReadingShow less
Mobile robots, drones move beyond the hype

Mobile robots, drones move beyond the hype

Supply chains are poised for accelerated adoption of mobile robots and drones as those technologies mature and companies focus on implementing artificial intelligence (AI) and automation across their logistics operations.

That’s according to data from Gartner’s Hype Cycle for Mobile Robots and Drones, released this week. The report shows that several mobile robotics technologies will mature over the next two to five years, and also identifies breakthrough and rising technologies set to have an impact further out.

Keep ReadingShow less
warehouse automation systems

Cimcorp's new CEO sees growth in grocery and tire segments

Logistics automation systems integrator Cimcorp today named company insider Veli-Matti Hakala as its new CEO, saying he will cultivate growth in both the company and its clientele, specifically in the grocery retail and tire plant logistics sectors.

An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.

Keep ReadingShow less