Mergers transform logistics landscape, says report
15 / 06 / 2016
Third-party logistics was dominated in 2015 by mergers and acquisitions, overcapacity and sagging fuel prices, says analyst Armstrong & Associates in its newly published report on the sector.
Major deals changed third-party logistics from mid-2014 through to 2015. Brad Jacobs and his XPO Logistics team helped make 2015 the largest merger and acquisition year in the 3PL sector with purchases of US-based Con-way and French-owned Norbert Dentressangle since A&A began tracking activity in 1999.
The resulting integrations have led to greater efficiency and profitability and should in time increase emphasis on quality and ‘lean’ process improvement initiatives.
While many 3PL warehouses were full in 2014 and 2015, price competition restricted value-added warehousing and distribution to a 2.2% increase in net revenue for the year.
A&A adds that the other big story in warehousing has been the growth of Amazon’s fulfillment centre operations. The online retailer’s warehouses account for 100m sq ft of space, making it the third largest global value-added warehousing and distribution operator behind DHL Supply Chain & Global Forwarding with 248m sq ft and XPO Logistics’ 151m sq ft.
The analyst notes: “Amazon is also growing its internal freight forwarding and domestic transportation management skills, so we are awaiting the day when it truly goes to market as an integrated 3PL.”