Logistics Mergers Add Value In Current Market

According to the Wall Street Journal, several logistics companies are looking for mergers and buyers as a slow shipping season continues. As BDP International and Pilot Freight Services are both looking for buyers it is a signal that other mid size firms may too be exploring options. Due to the unpredictability of the transportation market, many companies are looking to branch out into alternative facets, bundling service packages to increase the value of their offerings.

For example, Pilot Freight Services, who has not officially commented on their speculation, focuses primarily on air cargo and ground transportation services and will soon be tailoring its menu toward e-commerce packages including home delivery. Andrew Schmahl, of PricewaterhouseCoopers, states that companies want to merge to offer extra services and add value. “One of the biggest trends I’ve seen is the expansion of what a transportation company wants to be for its customers,” he said. “You need to have broad geographic coverage, you need to have a range of service options, and you need to be able to pull those together and essentially customize [solutions] for customers.”

The downside to expanding in this manner is evident in Roadrunner Transportation Services’ situation. This one time regional truck operator has expanded and now owns 25 subsidiaries. With stock prices down 70% over the last year, analysts are concerned about growth potential with so many plates spinning. Those concerns are not completely shared by the chief executive who disclosed it’s unlikely but not verboten that a small to midsize acquisition may occur if timing and price are attractive enough.

The merger trend we are seeing is further proof that well rounded candidates who are cross trained are the ideal hires of the time. Even those with unconventional skills and employment histories have a change to find a strong niche in this current market.


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