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Mike Rosendahl

E: mrosendahl@pcecompanies.com

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Industry Trends

Supply Chain Disruption on the Rise Again

Supply chain disruptions are on the rise again after a year of relative respite. With inventory strategy insufficient to overcome uncertainty, companies are now turning to building new supply chains and getting smarter about existing ones. Companies are investing in technology and data science to monitor and better analyze supply chain links. Larger retailers like Amazon, Walmart, and Target are scaling up information technology while logistics as a service gains momentum. Reshoring efforts and domestic manufacturing will take time to significantly impact the supply chain, emphasizing the need for predictability and consistency over speed.1

Airline Passenger Demand Surges Despite Goods Transportation Slowdown

While goods transportation is expected to experience stagnation and even declines in certain segments in 2023, the demand for airline passengers surpasses the slowdown. The reopening of travel post-lockdowns and restrictions has led to a faster-than-anticipated recovery in the passenger sector. Consumers are prioritizing travel, resulting in double-digit growth in the aviation industry. This growth, in turn, is driving a 4% increase in the global transport and logistics sector, surpassing the global GDP growth rate. By the end of the year, the sector is expected to surpass its pre-pandemic level after the significant drop experienced in 2020.2

Diesel Prices Decline as Spot Market Differentials Weaken

In the last 22 weeks, the benchmark price of diesel used for fuel surcharges has declined for the 20th time, reaching its lowest level since January 2022. The recent trend in diesel prices is attributed to falling spot market differentials, which play a crucial role in determining wholesale prices. The impact of falling differentials is already visible, with wholesale diesel prices experiencing a decline. The market's response suggests that major suppliers need to observe the anticipated strength in their order books. Furthermore, factors such as weak Chinese demand and a collapsing real estate market contribute to the restrained oil prices.3

Retailers Embrace Technology and Data to Enhance Supply Chain Forecasting

Retailers are investing in new technology and leveraging data to address the forecasting challenges that arose during the pandemic. With a focus on managing the flow of goods more effectively and optimizing sales and margins, companies are upgrading their forecasting abilities. Macy's, for example, has improved its visibility into consumer spending habits, while Dr. Martens is implementing a new demand and supply forecasting system. Supply chain experts emphasize the need for increased agility and nimbleness in forecasting, with retailers hiring employees with data science backgrounds and fostering better communication with suppliers to respond quickly to changing customer preferences. The growth of e-commerce has added complexity to forecasting efforts, requiring retailers to analyze demand across multiple channels and adapt fulfillment strategies accordingly.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • All Aboard America! Holdings, Inc.
  • Kelsian Group Limited
  • $351.00
  • Turo Inc.
  • IAC Inc.
  • $103.60
  • Envoy Technologies Inc.
  • Blink Mobility, LLC
  • $35.50

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • n/a
  • n/a
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • n/a
  • n/a
  • n/a

 

Source S&P Capital IQ as of 7/5/2023 and PCE Proprietary Data

PCE Transactions

Contacts

Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Eric Zaleski

Chicago Office

847-239-2466 |

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Kyle Wishing

Atlanta Office

404-994-4186 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. 1. Rothstein, Matthew. “Supply Chain Disruptions Are Returning. The 2021 Logistics Playbook Won’t Work This Time.” Bisnow, 25 June 2023.
  2. 2. Luman, Rico, and Oleksiy Soroka, CFA. “Global Transport and Logistics Outlook: Normalisation in a Different World.” think.ing.com, think.ing.com/articles/outlook-transport-and-logistics-normalisation-in-a-different-world. Accessed 11 July 2023.
  3. 3. Kingston, John. “Benchmark Diesel Price Down Again, East Coast Shows More Signs of Normalcy.” FreightWaves, 31 May 2022.
  4. 4. Young, Liz. “Retailers Are Trying to Fix Their Supply-Chain Forecasts.” WSJ, 16 June 2023.
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