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
Making the Case for FedEx Critical Inventory Logistics
FedEx Critical Inventory Logistics is designed to help companies streamline and drive costs out of their aftermarket service supply chains to meet customer service level agreements and grow their bottom-line revenues.
Download Today!
From the December 2017 Logistics Management Magazine Issue
Trade and transport analysts see rates rising across all modes in accordance with continued expansion of domestic and international markets. Economists, meanwhile, say shippers can expect revenue growth in transport verticals to remain in the 3%-plus range.
2018 Customs & Regulations Update:10 observations on the “digital trade transformation”
Moore on Pricing: Freight settlement and your TMS
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2018 Rate Forecast
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
Building the NextGen Supply Chain: Keeping pace with the digital economy
Peerless Media’s 2017 Virtual Summit shows how creating a data-rich ecosystem can eliminate...
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...

2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...
26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...