Logistics technology: Descartes acquires UK-based Global Freight Exchange
Jeff Berman, Senior Editor -- Logistics Management, 8/17/2007
WATERLOO, Ontario—Global on-demand software as-a-service (SaaS) logistics technology service provider Descartes Systems Group said today it has acquired Global Freight Exchange (GF-X), an England-based provider of electronic freight booking services for the air cargo market.
The sale price, according to a Descartes statement, was comprised of $5.9 million.
Descartes said this acquisition brings air freight booking capability services to its Global Logistics Network (GLN) platform, which, according to the company’s Website, is a “multimodal network of transportation providers and their customers that facilitates the interchange of logistics information and provides services that leverage information to help enterprises conduct logistics business more effectively.” Some GLN services offered are local haulage, fleet management, shipping management, track and trace, and rate management, among others.
And Descartes added that this acquisition will help create a global network that will enable shippers to manage the entire air cargo shipment lifecycle.
GF-X’ services platform is comprised of an online cargo reservation system where air carriers and freight forwarders can complete electronic air cargo bookings. Its system is used by several carriers and forwarders, including American Airlines, Air France, British Airways, Delta Air Lines, DHL, Kühne + Nagel, Lufthansa, and Panalpina. And Descartes noted that in support of this acquisition, several key air cargo carriers and freight forwarders have extended their customer commitments to use GF-X’s products and services.
“We’ve previously focused on standardizing and automating back-end shipment management processes to help our customers improve their operational productivity and performance,” said Art Mesher, Descartes’ CEO, in a statement. “Based on our successes to-date, our customers asked us to expand our focus to include the entire shipment management process. In combining with GF-X, we now have a customer-endorsed, comprehensive shipment management service that standardizes and automates the entire shipment management process and can improve efficiencies for the air freight community.”
Active acquirer:
The purchase of GF-X marks the sixth acquisition Descartes has made, dating back to last December. The others include: Cube Route Inc. in December 2006, Flagship Customs Services in June 2006, and Ocean Tariff Bureau and Blue Pacific both in March of this year.
Adrian Gonzalez, director of the Logistics Executive Council at ARC Advisory Group in Dedham, Mass., said that this acquisition makes sense for Descartes, based on the company’s recent track record.
"Descartes has been very methodical in its acquisitions over the past 18 months,” said Gonzalez. “Simply put, the company continues to extend the scope of its Global Logistics Network, thus maximizing its value proposition to logistics and transportation companies. The logistics sector is the fastest growing segment of the Transportation Management Systems (TMS) market. This acquisition strengthens Descartes' position in the market, particularly among airlines and logistics service providers with freight forwarding operations."
Gonzalez added that it is interesting that the airlines and forwarders have taken a stake in Descartes as part of the deal, noting that the more successful Descartes becomes, the greater the reward for these strategic clients.
A Descartes’ spokesperson told LM that its acquisition strategy has been to identify companies who are processing similar information for a similar customer base, but solving a different business problem.
"Descartes has historically been focused on providing technology solutions to help customers manage the back-end of the shipment lifecycle," said the spokesperson. " GF-X was focused on the first part of that lifecycle, the booking process. Descartes and GF-X’s mutual customers encouraged the 2 companies to come together to provide a service that manages the entire shipment lifecycle."
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