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Mike Rosendahl

E: mrosendahl@pcecompanies.com

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Industry Trends

M&A in Transportation and Logistics Continues to Struggle

According to a PwC report, deal activity over the last 12 months up to November 15, 2023 in the transportation and logistics sector has declined. The sector experienced an 82% drop in deal value and a 33% decrease in deal volume compared to FY 2022, with both metrics approximately half of their pre-COVID levels. This downturn brought the industry to a multi-year low as market players adjust their expectations. However, the report anticipates that 2024 will offer new dealmaking prospects, particularly for technology-driven deals that promise significant transformative returns.1

EV Momentum Pushes through a Dynamic Market

In 2023, electric vehicle (EV) sales experienced growth, albeit at a reduced rate, influenced by market shifts in China and elevated consumer expenses. Following a surge in 2022, lithium prices, crucial for EV batteries, declined due to industry adaptation to fluctuating demand and augmented supply. Nonetheless, the fundamental factors promoting EV adoption continue to be solid, and the sector is anticipated to sustain its vigorous expansion, bolstered by technological advancements and favorable policies.2

Navigating a Potential Industry Rebound

The 2024 outlook for the freight market hints at a possible revival after an extended downturn. Challenges like the supply-demand mismatch have led to lower rates, but there are encouraging indicators, including a modest rise in spot rates and growing freight volumes. This forecast suggests a rebound in 2024 that could favor shippers and underlines how rate fluctuations affect various sectors, providing key insights for those involved in the industry.3

Transportation Budget for 2024 Takes a Hit From 2023

The U.S. House subcommittee has sanctioned the fiscal 2024 Transportation Bill, assigning $90.2 billion to the Departments of Transportation and Housing and Urban Development. Within this, the Federal Motor Carrier Safety Administration receives $891.3 million, focusing on enhancing safety and efficiency in national infrastructure. This funding, earmarked for multiple transportation and safety agencies, is a reduction from the previous year's $98.931 billion allocation.4

Global Shipping Prices Surge Amid Houthi Attacks in Red Sea

Houthi rebel attacks in the Red Sea have significantly disrupted global shipping, leading major companies like BP to avoid the area entirely. This has compelled a reroute around Africa's Cape of Good Hope for many, affecting 17% of global shipping and likely raising cargo costs by 15-20%. Additionally, shipping insurance costs have surged. The US has sent the aircraft carrier, USS Dwight D Eisenhower, to the area to assist a coalition of countries that pledged to defend movement through the Red Sea. These changes may increase public pressure on Western governments and broadly impact global markets with an emphasis on shipping increases.5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Happy Returns, Inc.
  • United Parcel Service, Inc.
  • $465.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Road Safety Services, Inc
  • Harvest Partners, LP
  • n/a
  • A&R Bulk-Pak, Inc.
  • NOVA Infrastructure Management, LLC
  • n/a
  • Source Logistics Corp.
  • Palladium Equity Partners, LLC
  • n/a
  • Consolidated Chassis Management LLC
  • Oaktree Capital Management, L.P.
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • International Express Trucking Incorporated
  • Best Warehousing and Transportation Center, Inc.
  • n/a
  • TransportUS, Inc.
  • Ameriguard Security Services, Inc.
  • n/a
  • Hydra Logistics Group
  • Patriot Rail Company LLC
  • n/a
  • TaxiMKE
  • WHC MKE, LLC
  • n/a
  • American MedTrans
  • WHC MKE, LLC
  • n/a
  • Bluebird Express, LLC
  • Cryoport, Inc.
  • n/a
  • Ralph's Transfer Inc.
  • Riverstone Logistics, LLC
  • n/a
  • Euless B&B Wrecker Service Inc
  • Guardian Fleet Services, Inc.
  • n/a
  • Hemphill Brothers Coach Company, LLC
  • Dreamliner Luxury Coaches LLC
  • n/a
  • Arrow Coach Lines, Inc.
  • Village Travel, LLC
  • n/a
  • STS Intermodal, LLC
  • Boasso Global Inc.
  • n/a

 

Source S&P Capital IQ as of 1/19/2024 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. PricewaterhouseCoopers. “Transportation and Logistics: US Deals 2024 Outlook.” PwC
  2. 2. Lucas, Alec. “Lithium and EV Market Update: Slower-Than-Expected Sales Growth Just a Bump in the Road.” Global X ETFs, 26 Dec. 2023
  3. 3. Mcguire, Nathan. “2024 Freight Market Outlook | Wicker Park Logistics.”
  4. 4. Mulero, Eugene. “House Panel Advances Fiscal 2024 Transportation Bill.” Transport Topics, 13 July 2023
  5. 5. Dress, B. (2023, December 31). “Houthi squeeze on Red Sea shipping risks enormous cost to global economy” The Hill.
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