Caterpillar considering strategic options for third party logistics business

The company believes the third party logistics business is a unique and attractive asset that has excellent growth potential.

By ·

Caterpillar Inc. today announced it is examining a range of strategic options for its third party logistics business, which is part of its wholly owned subsidiary, Caterpillar Logistics Services, Inc. (Cat Logistics). The company believes the third party logistics business is a unique and attractive asset that has excellent growth potential.

“Over the last 24 years, the company has leveraged its traditional competitive advantage in the Caterpillar parts distribution business to create a global leader in third party logistics, with dedicated employees, unique and attractive assets and excellent growth potential,” said Caterpillar group president Stu Levenick.

Options under consideration include a potential sale of the third party business or structuring it as an independent business within Cat Logistics.

“The third party logistics business has been a high performing operation within Caterpillar, serving more than 50 customers worldwide in a number of different
industries,” said Steve Larson, Vice President of Caterpillar Inc. and Chairman and President of Cat Logistics. “Given Caterpillar’s increased focus on the significant growth opportunities in its core businesses, the company has decided to consider its options for the future of this business. As we work through these alternatives, we will continue to be sharply focused on delivering value for our customers,” Larson added.

Caterpillar manufacturing logistics and transportation operations and Caterpillar brand parts distribution are not part of the third party business and are not part of this strategic review. Those operations will continue as core businesses within Cat Logistics.

“This is interesting, but very logical,” said Charles W. Clowids jr.?Managing Director?Transportation Advisory Services for IHS in Boston. In an interview, he told LM that CAT Logistics is indeed a strong player and can likely do well as a “stand alone” enterprise.

“The expertise they initially developed for use by Caterpillar in-house, has been successfully provided to other major firms. A proven global 3PL should be attractive both as an investment and/or an acquisition.”


Caterpillar has retained B of A Merrill Lynch and Robert W. Baird & Co. to assist the company as it reviews alternatives. A final decision about the third party logistics business is expected by the end of 2011.

For related stories click here.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

3PL · Logistics · Logistics Management · All Topics
Latest Whitepaper
Lead your organization through the driver shortage and over-the-road regulations.
Potential transportation disruptions are looming as increased over-the-road regulations are set to go into effect in 2017. Experts believe these regulations will further impact the already challenged driver pool as well as reduce driver productivity.
Download Today!
From the January 2017 Issue
Following LM tradition, we start off the New Year with our annual “Rate Outlook” cover story and subsequent Webcast
Moore on Pricing: The other TMS functional options
2017 Rate Outlook: Where are freight transportation rates headed?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Rate Outlook: Where are freight transportation rates headed?
Join our panel of top oil and transportation analysts for an exclusive look at where rates are headed and the issues driving those rate increases over the coming year.
Register Today!
EDITORS' PICKS
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...

Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....