Two recent industry events – the DSV/Panalpina merger and CMA CGM’s takeover of CEVA – highlight ongoing consolidation and change in the international logistics space.
Post acquisition, the consolidated DSV Panalpina will become the #2 air freight provider globally and the #4 ocean freight forwarder. CMA CGM, a top five ocean carrier, gains a strong logistics arm as it pursues an end-to-end service offering.
Each company anticipates improved buying power, so any effect on selling rates to the public should be neutral or positive. However, significant cost savings has been planned as duplicated management teams and locations are eliminated.
For shippers currently working with any of these providers, now is a good time to reassess your portfolio of providers in light of your company’s particular needs. If price is paramount, the M&A activity may be beneficial to you. If customer service is the priority, or your company requires tailored transport solutions, consider adding a new provider into your mix as a contingency. Integration can be disruptive and you want to have alternatives in place.
Transportation providers should anticipate consolidation in the industry puts downward pressure on pricing. To counteract this risk, diversify your customer base. By focusing on gaining new clients from different market segments the effects can be minimized.
For small to medium sized 3PLs, market consolidation at the top of the industry may create new business opportunity. By tailoring solutions and emphasizing customer service, financial stability and long term relationships your business can succeed in the current industry environment.