Another acquisition has been announced by a leading logistics provider and this time it is Kuehne + Nagel acquiring US-based freight broker, ReTrans. According to the press release, ReTrans is a non-asset brokerage provider of intermodal transportation, as well as full and less-than-truckload services in the US and Canada. It has 68 locations and has annual revenues exceeding $500m.
According to Detlef Trefzger, CEO of the Kuehne + Nagel Group, “Our customers will benefit from comprehensive end-to-end supply chain solutions in North America. Combined with our strong sea freight, air freight and contract logistics operations, this transaction will accelerate our growth.”
Indeed, this acquisition will add the one important missing component, overland, to an already strong portfolio of logistics services that Kuehne + Nagel offers in the US and Canada.
The US freight brokerage market is a fragmented market, ripe for consolidation. For logistics providers such as XPO Logistics which has acquired several brokers, these acquisitions are meant to build end-to-end portfolios of supply chain services. But also, these brokers are coming in handy as the US economy continues to strengthen. In addition, the trucking industry is undergoing sea changes such as a dwindling pool of truck drivers and the number of truck companies shutting doors, no longer able to compete against larger competitors. Thus, the benefit of a broker – to manage transportation needs via its relationships with trucking and rail companies.
Besides competing against its traditional competitors, Kuehne+Nagel will find overland competition tough as it will come up against the likes of XPO Logistics, Coyote Logistics and C.H. Robinson, the largest freight broker in the US. However, while XPO Logistics and C.H. Robinson have made inroads into the European market via acquisitions of their own Kuehne + Nagel has a more established and globally connected network within Europe. This will bring these benefits to new customers within the US and Canada but also to existing customers interested in expanding further into North America.
As the economies in the US and Europe improve, M&A activity will continue to pick up with logistics providers looking to extend their geographic and service reach, providing end-to-end supply chain solutions. All ready we’ve seen US-based XPO Logistics acquire French provider Norbert Dentressangle and FedEx’s planned intentions to acquire Dutch-based TNT. Furthermore, rumors abound that DSV is looking for North American acquisitions so it’s likely the year 2015 will be a pivotal one for consolidation in the logistics industry.
GLOBAL SUPPLY CHAIN INTELLIGENCE (GSCi)