The number of mergers and acquisitions undertaken by the largest players in the worldwide express, mail and logistics sectors has reached its highest level since its peak at the height of the ?dotcom? boom. This was just one of the findings of Transport Intelligence?s latest report ?Global Logistics Strategies 2006?. The annual survey of M&A activity indicated that following a slump in deal volumes in 2002, when numbers fell by 36%, the level of completed deals has risen steadily. However, the number is still well below 2000/1 levels.

The report looks at the whole array of development strategies employed by companies in the express, mail and logistics sectors, and provides an assessment of their impact as well as listing all the major deals undertaken in the past eight years including, when available, valuations. A survey of the industry shows where acquisitions are taking place, which companies are making them and whether there has been any positive effect on profitability. The report includes in-depth profiles of 20 leading companies indicating where there priorities have been focused as they seek to expand functionally and geographically.

Commenting on the survey John Manners-Bell, Chief Analyst at TI, stated:?In terms of volumes the market has yet to rebound to levels seen at the turn of the century. The activity at the time was driven by express and logistics companies racing to build international networks and enhance their functionality. The global economy was booming and many companies were forecasting exponential growth on the back of internet driven package volumes. This resulted in the whole sector becoming overpriced. The dotcom crash and subsequent recession left many companies with burnt fingers, burdened with huge debts for the over-valued companies they had bought. Since then, express and logistics companies, with a few notable exceptions, have been more focused around integrating their acquisitions, or in some cases retreating from markets which they failed to penetrate.?

However according to Manners-Bell there are now more reasons for the sector wide increase in deals. ?In the past two years activity has again started to pick up. Not only are etailing volumes increasing significantly but international freight, driven largely by the soaring Chinese economy, is at an all time high. This has led to a resurgence in interest in freight forwarders, with companies such as Menlo (UPS SCS), Bax Global (Deutsche Bahn) and GeoLogistics (PWC Logistics) changing ownership.

?In terms of deal size, 2005 was the biggest ever,? he went on. ?Deutsche Post?s acquisition of Exel, plus significant purchases by Kuehne + Nagel, Deutsche Bahn, DP World and PWC Logistics set the year apart. It seems just when people think that consolidation in the industry can go no further, there is another round of M&A activity. In such a dynamic environment it seems likely that developments will continue at the same pace for a little while to come.?

Source: Transport Intelligence

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