Transportation & Logistics Technology Consolidation, and What You Need to Know

It’s been a busy couple of years in our industry. By now at least one of your technology providers have been bought by a competitor or investment institution. Some of these transactions brought benefit, but many bring risk to your original investments in your partners. The fact is we are just scratching the surface of uncomfortable mergers and acquisitions. So far we've seen a lot of consolidation based on grabbing market share; we have not seen a lot of disruptive acquisitions like we have in other markets. This will be the next trend.

Be prepared to have your technology providers snatched up by someone you don't know... or have never even heard of. For example, with the increased interest in regulatory management like EOBRS/ELDs it won’t be long for the companies managing regulatory components in other industries like healthcare or banking to start making investments in our industry. Nothing is more attractive to investors than mandates, or government-heavy industries. It’s just like utilities.

So let’s talk about what it means to you. Just to touch on the impacts, you need to think about the easy to identify stuff like roadmaps, commitments in pricing, or even you favorite account manager getting his walking papers. However, the most dangerous items are the ones that are hard to see. For example, if one of your major suppliers for ELDs is bought by a competitor, and that competitor owns a competing routing company to what you are using, will your existing routing partner be willing to share confidential information required to build an interface between the products? So many variables that impact your business, all out of your control. 

At CLS we spend a lot of time building these mergers and analyzing what the outcome will be, both good and bad. I will tell you that even with the best of intensions on behalf of the acquirer, things will certainly get complicated when you factor in "coopetition.”

Make sure you know the lifecycle of your suppliers, who their investors are and how long they want to be in the business. Change hurts no matter what. Change you didn't plan for hurts a whole lot more!

So keep your ears and eyes open and make sure that your providers are not in the business of getting out of business. 

TAGS: News
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish