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Mike Rosendahl

E: mrosendahl@pcecompanies.com

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Industry Trends

U.S. Trucking Market Faces Potential Tightening

The U.S. trucking market is showing signs of recovery, driven by growth in the manufacturing sector. The ISM Manufacturing PMI index rose to 50.3 in March, indicating increased manufacturing activity and higher demand for truckload services. Despite this, spot and contract rates have been volatile, with contract rates down 14% year-over-year. Anticipated tightening in the year's second half could lead to higher costs and logistical challenges for shippers.1

Nearshoring in Mexico Enhances Investment Demand in Logistics

U.S. companies are ramping up investments in Mexico's logistics infrastructure to capitalize on the nearshoring trend, positioning Mexico as the top U.S. trading partner. Despite a surge in cross-border transportation, challenges such as capacity constraints and a 56,000-driver shortage persist. Firms are mitigating these issues by securing long-term carrier commitments and expanding facilities. As U.S.-Mexico trade flourishes, enhancing supply chain efficiency remains critical for American businesses leveraging nearshoring opportunities.2

FedEx Weighs Freight Division Spinoff

FedEx’s potential spin-off of its Freight unit into a separate publicly traded company could significantly impact middle-market companies in the trucking sector. As the largest operator in the less-than-truckload (LTL) sector, FedEx Freight's spin-off could increase competition and market dynamics. Middle-market companies might benefit from new opportunities and higher rates as the largest player becomes a stand-alone entity. This move also aligns with FedEx's Drive transformation, aimed at streamlining operations and responding to market changes.3

Cautious Optimism: Shippers Navigate Uncertain Waters in Q2 2024

BlueGrace's Logistics Confidence Index for Q2 2024 signals a cautious outlook among shippers, with predominantly neutral to slightly negative sentiments. Revenue growth expectations reveal a modest 2% rise in negative sentiment, while negative views on inventory levels have surged to a 7-quarter high of 16%. Confidence in orders has dropped by 9% compared to Q1, with 56% maintaining a neutral stance. These trends suggest a challenging logistics landscape, encouraging businesses to adopt flexible strategies amid cautious industry sentiment.4

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Eagle Bulk Shipping Inc.
  • Star Bulk Carriers Corp.
  • $1,109.85
  • Assets of Reading Jet Center, Inc.
  • Reading Regional Airport
  • $9.20
  • Eb Rental, Ltd.
  • EB Strategies Inc.
  • $1.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Star Shuttle, Inc.
  • Trivest Partners, L.P.
  • n/a
  • Segers Aero Corporation
  • H.I.G. Capital, LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Moving Forward
  • WellRive
  • n/a
  • Alamo Toyota, Inc.
  • Shottenkirk Automotive Group, Inc.
  • n/a
  • Export-Import Services, Inc.
  • Share Logistics B.V.
  • n/a
  • Operations of DVA Associates, Inc.
  • Radiant Logistics, Inc.
  • n/a
  • Moonstruck Leasing, LLC
  • Celebrity Coaches, LLC
  • n/a
  • Almar Management Ltd.
  • Suntex Marina Investors LLC
  • n/a
  • Prospect Airport Services, Inc.
  • Unifi Aviation, LLC
  • n/a
  • Mobility4All
  • Carepool
  • n/a
  • Assets and Operations of Viking Worldwide, Inc.
  • Radiant Logistics, Inc.
  • n/a
  • CLX Logistics, LLC
  • Quantix SCS, LLC
  • n/a

 

Source S&P Capital IQ as of 7/9/2024 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. Uber Freight, "Freight Market Update." Uber Technologies Inc., May 8, 2024.
  2. 2. Mahoney, N. “Borderlands Mexico: Nearshoring to continue boosting cross-border trucking in 2024.” FreightWaves, May 19, 2024.
  3. 3. Page, P. “Trucking Experts Project Spinoff of FedEx’s Freight Business.” The Wall Street Journal, June 26, 2024.
  4. 4. Berman, J. “BlueGrace Logistics Confidence Index sees signs of stabilization for the third quarter.” Supply Chain 24/7, May 20, 2024.
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