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Top 50 3PLs: Will mergers and acquisitions alter the third party logistics landscape?

A flurry of major service provider deals captured mainstream headlines in recent months, but the consequence of this activity has yet to be measured by domestic and international shippers. Meanwhile, the EU flounders, Asia remains strong, and emerging nations may represent the next great opportunity for the major 3PL players.
By Patrick Burnson, Executive Editor
June 01, 2012
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“Overall, logistics deal activity seems more likely to rise than fall given continued global economic expansion and the secular trend of rising infrastructure concessions,” says Evans.

For 3PLs, adds Evans, consolidation will be an ongoing given, as more pure-play domestic companies seek to expand globally. “I can assure you that even the 3PLs found only on ‘domestic’ listings will at some point be hauling or arranging to haul freight globally,” he says. “For those bigger companies seeking to expand worldwide, mergers and acquisitions can be an attractive way to proceed.”

If one needed any more evidence of this phenomenon, consider the merger and acquisition activity of just a few months ago. UPS not only made a celebrated purchase of TNT Express, but went on to buy Italian pharmaceutical logistics company Pieffe. Geodis, meanwhile, acquired French pharmaceutical logistics and distribution company Pharmalog.

Then in a move to broaden its own pharmaceuticals footprint, DHL Global Forwarding acquired Lufthansa’s 50 percent ownership in its joint venture company LifeConEx, a cold chain management provider in the life sciences industry.

In the Asia Pacific region, merger and acquisition activity was just as intense. Kerry Logistics acquired Trustspeed Medicine Logistics in Taiwan, and it also established a joint venture with Mosskito Logistics in Australia to expand its cold chain distribution segment.

Meanwhile, data from Armstrong & Associates—the third party logistics consultancy that compiles our annual top rankings of global and domestic 3PLs—shows that all of this global merger and acquisition activity certainly makes sound, business sense. In fact, Armstrong reports that total global 3PL gross revenue in 2011 at $133.8 billion was up 5.2 percent over 2010. Furthermore, net revenues, at an estimated $61 billion, posted a 5.9 percent annual gain.

About the Author

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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 .(JavaScript must be enabled to view this email address).


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