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Home » 3PL CCOs see 2010 recovery, pick-up in M&A activity
post-conference report

3PL CCOs see 2010 recovery, pick-up in M&A activity

October 1, 2009
Mark B. Solomon
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After a rough 2009, demand for third-party logistics provider (3PL) services should resume in 2010, predicted the chief commercial officers (CCOs) of four of the country's biggest 3PLs—Ryder, GENCO, CEVA, and Exel—at the CSCMP Annual Global Conference. That demand will be accompanied by an increase in merger & acquisition (M&A) activity with niche players being the prime targets, they said.

While the four CCOs—who are essentially their firms' top business development executives—expect that the current challenging economic environment and cutthroat competition will continue, they also foresee a more favorable climate for their businesses. "We're betting on growth next year," said Stephen Dean, CCO of Ryder System Inc.

The four executives said they would pursue acquisitions of smaller niche companies as well as strategic alliances and partnerships. They all agreed that many smaller firms will either be bought out or fail, though mid-size companies with more financial muscle and with a solid position in a specialized service will likely survive. With the top 3PLs controlling only 15 percent of the U.S. logistics market, the field remains fragmented and ripe for consolidation, they said.

Although their future strategy focuses on expanding through acquisitions, the executives said supporting their customers' internal expansion would be a key objective through the rest of 2009 and into 2010. But they cautioned against assuming that success will come from internal expansion alone. "I don't think bigger is better. I think better is better," said Christopher J. Monica, executive vice president, sales and marketing for CEVA Logistics.

Transportation
KEYWORDS CEVA Logistics Exel Genco Ryder
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    Marksolomon
    Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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