Supply Chain Disruption on the Rise Again
Supply chain disruptions are on the rise again after a year of relative respite. With inventory strategy insufficient to overcome uncertainty, companies are now turning to building new supply chains and getting smarter about existing ones. Companies are investing in technology and data science to monitor and better analyze supply chain links. Larger retailers like Amazon, Walmart, and Target are scaling up information technology while logistics as a service gains momentum. Reshoring efforts and domestic manufacturing will take time to significantly impact the supply chain, emphasizing the need for predictability and consistency over speed.1
Airline Passenger Demand Surges Despite Goods Transportation Slowdown
While goods transportation is expected to experience stagnation and even declines in certain segments in 2023, the demand for airline passengers surpasses the slowdown. The reopening of travel post-lockdowns and restrictions has led to a faster-than-anticipated recovery in the passenger sector. Consumers are prioritizing travel, resulting in double-digit growth in the aviation industry. This growth, in turn, is driving a 4% increase in the global transport and logistics sector, surpassing the global GDP growth rate. By the end of the year, the sector is expected to surpass its pre-pandemic level after the significant drop experienced in 2020.2
Diesel Prices Decline as Spot Market Differentials Weaken
In the last 22 weeks, the benchmark price of diesel used for fuel surcharges has declined for the 20th time, reaching its lowest level since January 2022. The recent trend in diesel prices is attributed to falling spot market differentials, which play a crucial role in determining wholesale prices. The impact of falling differentials is already visible, with wholesale diesel prices experiencing a decline. The market's response suggests that major suppliers need to observe the anticipated strength in their order books. Furthermore, factors such as weak Chinese demand and a collapsing real estate market contribute to the restrained oil prices.3
Retailers Embrace Technology and Data to Enhance Supply Chain Forecasting
Retailers are investing in new technology and leveraging data to address the forecasting challenges that arose during the pandemic. With a focus on managing the flow of goods more effectively and optimizing sales and margins, companies are upgrading their forecasting abilities. Macy's, for example, has improved its visibility into consumer spending habits, while Dr. Martens is implementing a new demand and supply forecasting system. Supply chain experts emphasize the need for increased agility and nimbleness in forecasting, with retailers hiring employees with data science backgrounds and fostering better communication with suppliers to respond quickly to changing customer preferences. The growth of e-commerce has added complexity to forecasting efforts, requiring retailers to analyze demand across multiple channels and adapt fulfillment strategies accordingly.4
Largest Transactions Closed
- All Aboard America! Holdings, Inc.
- Kelsian Group Limited
- Turo Inc.
- IAC Inc.
- Envoy Technologies Inc.
- Blink Mobility, LLC
Other Financial Buyer Transactions Closed
Other Strategic Buyer Transactions Closed
Source S&P Capital IQ as of 7/5/2023 and PCE Proprietary Data
This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.
EBIT - Earnings Before Interest and Taxes