In today’s rapidly changing economy, mergers and acquisitions are a defining force that’s reshaping industries of all kinds — logistics included. Over the past year, the logistics industry has undergone multiple transformative changes as major players have engaged in strategic acquisitions. From e-commerce companies joining forces to logistics providers acquiring innovative startups, these transactions have dramatically altered the logistics landscape.
Notable Acquisitions in the Industry
Whenever a company closes or changes, the dynamic within our industry shifts, which can be both scary and exciting. Opportunities for new partnerships arise, but with it comes the reminder that things can change in an instant. In the past year, several large acquisitions and shutdowns shook the logistics industry.
J.B. Hunt Transport Services Inc., one of North America’s largest supply chain solutions providers, recently announced their agreement to purchase the brokerage operations of BNSF Logistics, a subsidiary of BNSF Railway that provides third-party logistics services for full truckload, flatbed, temp-controlled, drayage, expedited, and less-than-truckload services. J.B. Hunt frames the acquisition as a step toward their mission of creating one of the most efficient transportation networks in North America.
In other big news, Yellow Corp. filed for bankruptcy after nearly 100 years of business. This announcement followed massive layoffs and a company-wide halt in operations. As a dominant player in the logistics industry, Yellow became the third-largest small freight trucking company in the U.S. But as the company’s debt grew to $1.5 billion, it began to lose customers, and its demise became imminent. This closing has left a lot of debt to pay and thousands of employees out of work.
While the effects of these changes in the logistics marketplace are obvious for those directly involved, they have a wider impact on the industry as a whole.
What Mergers and Acquisitions Mean for the Logistics Industry
Naturally, mergers and acquisitions have changed the dynamics of the logistics industry. In the current market, there’s an increase in companies looking to sell and an unprecedented pool of potential buyers. As companies are increasingly aware of the unforgiving nature of the logistics industry, increased interest rates and a weak freight market have made selling even more appealing.
Merging allows businesses to combine their assets and diversify their offerings to tap into new customer segments. As technology changes how the industry operates and companies look for ways to maintain a competitive advantage, mergers and acquisitions give businesses access to new technologies and talent that allow them to adapt to the changing market faster than they could on their own.
With the rise in international trade, businesses are looking for ways to access new opportunities and markets. Mergers with companies in other regions allow companies to establish a global presence using the acquired company’s existing knowledge of local markets.
While acquisitions may be appealing for some businesses, too much of a good thing can become a bad thing. Consolidation within the trucking industry means there are fewer players in the market. This development isn’t good for customers, as it could limit choices and lead to higher prices and less innovation. Less competition means companies don’t have to work as hard to impress customers, which can lower standards and the quality of services. In light of these changes, it’s more important than ever to choose a logistics provider with a proven track record of doing what’s best for their customers.
The UCW Difference
With so much change in the logistics industry, you need a steady and reliable partner. You also need to feel stable and informed — not like the rug is about to be pulled out from under you. At UCW Logistics, we’re proud to be a partner you can count on.
UCW was created under Union Service Industries, Inc., in 2013. We’re a fourth-generation family-owned business and continue to serve both existing Union Service Industries customers and new ones with the same level of professionalism, courtesy, and service that have defined our company from day one.
We believe in doing the right thing and treating you with the respect you deserve. Communication is key because you deserve to know that your freight is being taken care of. We view our customer relationships as partnerships where we work together to get freight delivered to customers. Because whether you’re a shipper or carrier, we view your success as our success, too.
The crowded logistics industry can be difficult to navigate on your own. With tens of thousands of logistics companies to choose from, you need to find a partner that gets the job done right every time. At UCW, we do what we say we’ll do exactly when we say we’ll do it. When you partner with us, there are no empty promises, just results.