After a two-year hibernation period caused by the financial crisis and subsequent economic downturn, animal spirits seem to be returning to the world of logistics mergers and acquisitions.

According to a report issued in mid-February by consultancy PwC (formerly PricewaterhouseCoopers), 42 deals in the global transportation and logistics sector valued at $50 million or more were announced in the fourth quarter of 2010, up from 38 deals in the third quarter. Most notable was the spike in deal value, a sign that "mega-deals" were back in vogue. The aggregate price tag of announced deals in the fourth quarter was $35.6 billion, up from $16.9 billion in the prior quarter.

Of the 14 deals in 2010 exceeding $1 billion, six were announced in the fourth quarter. Half of all large deals last year involved either acquisitions or public-private partnerships in what the report characterized as the "passenger ground" sector, such as rails and transit.

The rise in global deal-making activity came despite a relatively quiet U.S. landscape. There were 21 deals involving North American companies, compared with 63 in the Asia & Oceania region and 25 in Europe. Furthermore, only one mega-deal in the fourth quarter involved a North American entity—Southwest Airlines' pending $1.04 billion purchase of rival Air Tran Holdings.

Kenneth Evans, U.S. transportation and logistics leader for PwC, said fourth-quarter M&A activity took the global industry to levels not seen since 2008. With economies rebounding, corporate balance sheets strengthening, credit markets recovering, and companies stockpiling billions of dollars in cash ready to put to work, Evans sees deal activity remaining robust through the balance of the year and well into 2012. He also predicts that by next year, global M&A activity will have returned to levels not seen since 2007, the last full year of strong economic growth before the financial and economic roofs caved in.

Evans said that while a degree of caution still exists, fear is giving way to a much greater appetite for risk, with more companies on a stronger financial footing and the global recovery self-sustaining. As evidence, Evans said he sees fewer M&A deals involving so-called "distressed assets." Most of those types of transactions, he said, have "already been arranged and are coming out of the system."

"Many companies are in a better position to engage in new deals, as evidenced by lower average financial leverage and higher cash positions," Evans said in a statement announcing the release of the report, Intersections: Fourth-quarter 2010 global transportation and logistics industry mergers and acquisitions analysis. "As a result, the overall tone of the deal market is highly positive, and we're optimistic about ... deal activity in 2011."

Evans says accelerated M&A action will not be confined to big companies and big deals. Smaller companies—including family-owned businesses waiting for their company's prospects to improve before they put themselves on the block—will also get into the game, he said.

Evans said even though increased M&A action might trigger consolidation among service providers, shippers should not be worried about either a significant increase in rates or reduced access to innovative products and services. The global freight industry remains very fragmented and competitive, and though freight rates have firmed in response to an economic recovery, there are still "so many options for shippers to play one transportation company off of another," he said.

Evans added that growth in the formation of new businesses—and the new product and competitive pricing that accompany them—effectively mitigates the impact of M&A-driven consolidations shrinking the provider universe.