Maersk swoops on Pilot to expand US forwarding presence

By Damian Brett

Shipping giant AP Moller Maersk has swooped on US forwarder Pilot Freight Services as it continues to expand its logistics presence.

The transaction price is $1.7bn and the deal is expected to be completed in the second quarter of 2022. The current owners of Pilot are private equity firm ATL Partners and investor British Columbia Investment Management Corporation.

According to consultant Armstrong & Associates, Pilot was the world’s 24th largest airfreight forwarder in 2020 with volumes of 240,000 tonnes.

Pilot specialises in first, middle and last mile as well as border crossing solutions, and in the big and bulky freight segment in North America for B2C and B2B distribution.

The company operates a network of 87 stations and hubs. It uses mainly third party providers of trucking and has access to controlled capacity.

The combined Pilot and Maersk will offer approximately 150 facilities in the US, including distribution centres, hubs and stations.

Maersk said the deal would extend its integrated logistics offering “deeper into the supply chain of its customers”.

The Danish firm added that the pandemic had accelerated macro trends in the supply chain, such as the increased shift towards e-commerce, especially for big and bulky items.

“This important shift will continue and necessitate the creation of new distribution networks and solutions to support companies adapting their supply chains to these new consumer demands,” it said. “The transition goes for numerous B2C vertical segments such as retail, home furnishings and consumer electronics as well as B2B segments such as aerospace, automotive and healthcare.”

Narin Phol, regional managing director at Maersk North America, said: “By investing in first mile, middle mile and last middle and integrating them we meet a clear customer demand.

“This acquisition will add even more expertise and supply chain capacity to customers facing capacity constraints and multiple handoffs with providers in the B2C and B2B space.

“After completion of this transaction, we will be able to help them install stronger, more integrated supply chains with better visibility and better outcomes for consumers. We look forward to welcoming the Pilot team aboard the AP Moller-Maersk family.”

Vincent Clerc, chief executive of ocean and logistics, AP Moller-Maersk, said: “In Maersk we continue our path to develop truly integrated logistics offering for our customers, offering them better visibility, more control and resilience in their supply chains.

“Adding the capabilities of Pilot is especially important because it will allow us to create more exciting solutions for our customers and support them through the acceleration of the migration towards e-commerce. Furthermore, it will open significant cost synergy opportunities by leveraging the capabilities we have already developed in the network.”

There has been much speculation in recent months that Maersk was preparing to move on another freight forwarder, with CH Robinson rumoured to be the target. However, the company dismissed the speculation late last year.

The takeover comes as cash rich shipping lines – due to pandemic related rate increases – have been expanding their presence in the logistics industry as they look to offer a complete range of supply chain services.

In December, Maersk announced the purchase of Hong-Kong-based LF Logistics. In November the company expanded its presence in air cargo with the purchase of forwarder Senator International and an investment in freighter aircraft.

The company also reported record earnings. In 2021, revenue was up 55% to $61.8bn, earnings before interest, tax, depreciation and amortisation tripled to $24bn and free cash flow was $16.5bn, allowing the company to make “strategic long-term investments into decarbonisation and logistics growth, combined with strong cash distribution to shareholders”.

Maersk makes logistics acquisition

Maersk targets air cargo with Senator acquisition and freighter order

 

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