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Mike Rosendahl

E: mrosendahl@pcecompanies.com

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Industry Trends

Labor Day Marks Return to Holiday Traveling

The Transportation Security Administration reported that 8.76 million travelers went through their checkpoints the first weekend of September 2022, outpacing the same Labor Day weekend in 2019. The first holiday to top pre-pandemic levels and the lowest cancellation rates for 2022 holiday weekends mark a return to normal for airports. With more people starting to book flights in 2022, airlines hope to keep the momentum going through the rest of the year.1

Union Contract Disputes Stall on West Coast Ports

Port Labor contract talks have been ongoing since mid-May and were intended to conclude in early fall. However, it is looking more likely that the negotiations will continue through the year into early 2023. These contracts cover ports along the west coast and some significant hubs for trade with Asia. Although the workers continue to work without a contract, any escalation in these negotiations could cause significant delays in major logistical hubs of the United States.2

Largest Nationwide Railroad Strike in 20 Years Prevented

A provisional agreement was made between the most significant railroads and corresponding unions this September, with assistance from the Biden Administration. Among the concessions were 24% wage increases over the next five years, annual lump sum payments to workers, and increased coverage for paid days off. Freight railroads had taken steps to prepare for a stoppage, such as rejecting hazardous freight or sensitive cargo, but have now reopened the rails to all cargo.3

Container Shipping Companies Race into Airfreight

Over the past couple of years, big container shipping companies, like AP Moeller-Maersk and Mediterranean Shipping Co. have shied away from the more expensive airfreight option. As they continue to feel the effects of labor shortages, backed up ports, and increased delay costs, they have now put more of their business in the air to meet key customer demand. Over the past three years, there has been a 20% increase in freight planes, with the global fleet expected to ramp up.4

VMG Catalyst’s New Fund to Target Logistics

The venture capital fund has raised $400 million to target supply chain technology. The company is focused on the retail and consumer-brand supply chain sectors, which have had significant supply chain challenges and rising inflation. Innovative software and advanced supply chain technologies are expected to be the biggest driver of value in the sector, and VMG hopes to capitalize on this.5

Oil Prices Rise After OPEC+ Production Cuts

OPEC+ target cuts of 2 million barrels daily, the most significant reduction since 2020 in response to the global covid-19 pandemic. The production cuts will likely cause Brent Crude Oil prices to trade in the $90 to $100 per barrel range. The price could surpass $100/barrel by the end of the year – leading to more pain at the pump for businesses and consumers already impacted by inflation and a slowing economy.6

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Deliverr, Inc.
  • Shopify Inc.
  • $2,100.00
  • Transportation Resources, Inc.
  • Heartland Express, Inc.
  • $525.00
  • USA Truck, Inc.
  • Schenker, Inc.
  • $473.31
  • TAGG Logistics, LLC
  • Hub Group, Inc.
  • $103.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • The InStar Group, LLC
  • J.P. Morgan Asset Management, Inc.
  • n/a
  • United Road Towing, Inc.
  • Mill Point Capital LLC
  • n/a
  • Sunset Pacific Transportation, Inc.
  • PGIM Private Capital; Red Arts Capital
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Firebird Bulk Carriers, Inc./Phoenix Oil, Inc.
  • GulfMark Asset Holdings, Inc.
  • $48.88
  • Substantially All Assets of the Sand Hauling Business of Continental Intermodal Group LP
  • NexTier Oilfield Solutions Inc.
  • $31.67
  • Freight Connections
  • Transportation and Logistics Systems, Inc.
  • $9.90

 

Source S&P Capital IQ as of 10/13/2022 and PCE Proprietary Data

PCE Transactions

Contacts

Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Michael Poole

Orlando Office

407-621-2112 |

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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. Prang, A. “Labor Day Is First Holiday to Top Prepandemic Travel Levels.” Wall Street Journal, 6 September, 2022.
  2. Berger, P. “Port Labor Talks Stall as Worker Disruptions Grow.” Wall Street Journal, 19 September, 2022.
  3. Thomas, K. and et.al. “U.S. Railroad Strike Averted as Tentative Deal Is Reached, Biden Says.” Wall Street Journal, 15 September, 2022.
  4. Paris, C. and Katz, B. “Big Ocean Shipping Lines Turn to Planes as Supply-Chain Snarls Deepen.” Wall Street Journal, 19 September, 2022.
  5. Vartabedian, M. “Venture Firm VMG Catalyst Raises $400 Million Logistics-Focused Fund.” Wall Street Journal, 3 August, 2022.
  6. Kearney, L. “Oil prices continue rise on cuts to OPEC+ production targets.” Reuters, 6 October, 2022.
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