One of our responsibilities is to understand industry trends, and there is no question that trucking is under massive disruption. Here is what we are hearing.
“Now that consumers are more comfortable buying appliances, treadmills and outdoor grills online, national trucking companies are plowing investment into winning the business by displacing or buying up local operators.”
“Since it’s both risky and difficult to grow a fleet quickly by adding drivers, it stands to reason that the easiest way to pump top line revenue would be through mergers and acquisitions, and indeed, it’s what growth companies like XPO Logistics (NYSE: XPO) and Daseke (NASDAQ: DSKE) have done …”
“We would expect operating firms to continue consolidating their industry sectors and/or diversifying their range of services offered in 2018 and beyond. The cost of debt and equity capital remains very low, by almost any reasonable standard, while organic growth is challenged by the lack of qualified, compliant blue collar labor. Plus, customers are becoming increasingly comfortable dealing with fewer, larger, more diversified providers of full logistics solutions.”
“A few well-heeled companies are making a run at (trucking consolidation). Probably the biggest is XPO Logistics Inc., which is armed with a war chest of several billion dollars. In 2015, it acquired Con-Way for $3 billion, as well as France’s Norbert Dentressangle for $3.53 billion. The company’s CEO, Bradley Jacobs last month told The Wall Street Journal that XPO had identified a dozen potential takeover targets and were in talks with each. Jacobs said that he anticipated one or two major deals by the end of this year. He previously said his company was ready and willing to spend up to $8 billion in acquisitions..”
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