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.
French third-party logistics (3PL) firm Norbert Dentressangle, making its first major push into the U.S. 3PL
market, said today it will acquire Jacobson Co., a contract logistics, transportation management, and packaging
provider from its majority owner, private equity firm Oak Hill Partners, for $750 million in cash and debt.
The transaction, set for completion around mid-September, marks the second big transaction this week in the fast-growing
contract logistics segment, where providers offer warehousing and distribution services to companies on a contractual basis
and deliver transportation management solutions under that umbrella. On Tuesday, XPO Logistics Inc. said it would buy New Breed
Logistics for $615 million in debt, a move that continues to broaden XPO's operations beyond its core freight brokerage business.
XPO also bought Atlantic Central Logistics—which provides "last mile" services delivering heavier weighted goods like
appliances and desks from distribution centers and stores to residences, businesses, and job sites—for $37 million in cash.
The Dentressangle-Jacobson deal also represents one of the largest acquisitions in years of a U.S. 3PL by a European
counterpart. The last deal of similar significance occurred in the fall of 2005 when German logistics giant DHL Deutsche
Post bought Exel, which at the time was a contract logistics firm based in Westerville, Ohio; following the acquisition,
the Exel brand was retained for North America. Perhaps ironically given the Dentressangle-Jacobson deal's focus on so-called
strategic 3PL relationships, Exel and its sister company DHL Supply Chain said on Monday they have launched a freight brokerage
operation, which is almost exclusively a transactional business, serving the U.S., Canada, and Mexico.
Dentressangle said the Jacobson acquisition should boost annual revenue approximately 15 percent to about US$6.8 billion.
Jacobson, based in Des Moines, Iowa, generates about 70 percent of its $850 million in annual revenue from contract logistics,
according to estimates from Armstrong & Associates, a U.S. consultancy. The food and beverage vertical is Jacobson's largest,
generating about 41 percent of revenue, Armstrong said. The two companies are strong in such verticals as food and grocery,
consumer packages goods, and retail, said Evan Armstrong, president of the consultancy.
About 84 percent of Jacobson's U.S. warehouse network is dedicated to a specific customer, with the remaining warehouses
shared by multiple users, according to estimates from Transport Intelligence, a U.K. consultancy. About half of Jacobson's
business is in the Midwest, with a quarter of its revenue generated by transportation management services usually linked to
dedicated warehousing contracts, the consultancy added.
Thomas Cullen, an analyst for Transport Intelligence, said he was somewhat surprised by the announcement because Dentressangle
had previously indicated it was looking to buy freight forwarding companies. Dentressangle has 57 forwarding offices in 14
countries, according to Armstrong data.
In a phone interview, Montjotin said the U.S. market is growing faster than Europe's, and there is more logistics outsourcing
activity in the United States than in Europe. He added that about half its customer base is either headquartered in the U.S. or
trades with the U.S. market.
Dentressangle's acquisition spree began in earnest in late 2007, when it acquired Christian Salvesen, a European transport
and logistics firm with Norwegian roots dating back centuries. From 2010 to 2013, it acquired various firms that expanded its
reach within Britain, France, Russia, and China.
Dentressangle has no near-term plans to expand in the United States beyond the Jacobson deal, according to Montjotin. "We
need to understand the U.S. market and learn from the U.S. market," he said.
Montjotin added that it would be "somewhat arrogant" for Dentressangle to declare that it was in acquisition mode in the
United States so soon after buying Jacobson and working to build relationships with its customers. Top Jacobson executives
are expected to remain with the company after the transaction closes, he said.
Also today, Dentressangle posted first half 2014 results which showed a 19-percent increase in logistics revenue compared
to the same period in 2013. The company reported a 13.4-percent year-over-year revenue gain across all its businesses. The gains
were attributed to a pickup in the European economy and increasing demand for Dentressangle's services, the company said.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.