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    Transportation & Logistics Q1 2022

    Q1 2022 Transportation Logistics

    Industry Trends

    Ports Use the Import Lull to Recover

    Supply chain backlogs were sent into a frenzy during Q4 2021, but the current seasonal lull in imports allows ports to catch up before shipments pick up. Although ships are still waiting off the coast of busy ports in California, the current number is the lowest seen since September of 2021. If port operators and logistics companies keep containers moving, congestion will continue to ease in 2022.1

    Amazon Takes on UPS and FedEx

    Amazon continues its rapid network expansion to increase flexibility and decrease reliance on third-party providers. Since May 2020, Amazon has increased its daily average number of Prime Air flights from 85 to 187 and increased its fleet from 50 to about 110 jets, including partners servicing the e-commerce company. For comparison, UPS has 289 aircraft, and FedEx has 474 aircraft. It is estimated that nearly 75% of the U.S. population is within 100 miles of an Amazon Air airport, up 25% since May 2020.2

    Ford Separates Electric Vehicle Division

    Ford announced that it would separate the gas engine and electric vehicle operations into two separate divisions. Both divisions will be kept in-house; this move allows Ford to better invest in its EV division, attract new expertise, and implement a new strategy away from the legacy product. There is speculation that Ford might spin off the EV operations, but executives have dismissed this as of late.3

    Ocean-Freight Companies Buy Cargo Planes

    Major ocean shippers are using excess cash to purchase fleets of planes as an alternative for customers willing to pay to avoid delays. Record high ocean-freight prices have made airfreight more affordable, as the price difference between the two has been cut in half. These companies are not attempting to compete with the primary air freight operators, but the acquisitions increase the services offered and lead them to become end-to-end logistic providers.4

    Supply Chains Improve Through Shared-Data

    The White House recently proposed a pilot program for oceanic supply chain operators to share data to improve the flow of goods. The program currently has 18 companies, including large operators, Target Corp and FedEx, and the administration is looking to increase participation. Sharing data will allow ports and logistics providers to prepare the goods to be processed and allow companies to strategically send goods based on the data, similar to the data sharing seen in the aviation industry.5

    Largest Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • Intermodal Business of XPS Logistics in North America
    • STG Logistics, Inc
    • $710.00
    • Whiplash Inc.
    • Ryder System, Inc.
    • $480.00
    • Substantially All of the Assets of Zenith Freight Lines, LLC
    • J.B. Hunt Transport, Inc.
    • $86.94
    • Limetree Bay Terminals, LLC
    • West Indies Petroleum Limited; Port Hamilton Refining and Transportation, LLLP
    • $62.08
    • AAT Carriers, Inc.
    • Covenant Logistics Group, Inc.
    • $55.00

    Other Financial Buyer Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • Buske Lines, Inc.
    • Fourshore Partners
    • n/a
    • APP Jet Center
    • Ridgewood Infrastructure LLC
    • n/a
    • Orange Rail Inc.
    • Connor, Clark & Lunn Infrastructure Ltd.; Alpenglow Rail LLC
    • n/a
    • Magnate Worldwide, LLC
    • Littlejohn & Co., LLC
    • n/a

    Other Strategic Buyer Transactions Closed

    • Target
    • Buyer
    • Value($mm)
    • FASCOR, Inc./LCS, Inc.
    • Hy-Tek Material Handling Inc.
    • n/a
    • Rightaway Delivery LLC
    • Dropoff, Inc.
    • n/a
    • Smartway Transportation, Inc.
    • Transport Investments, Inc.
    • n/a
    • Performance Logistics, LLC
    • Direct Connect Logistix, Inc.
    • n/a
    • Arnold Transportation Services, Inc.
    • Pride Group Logistics Ltd.
    • n/a
    • West Air, Inc.
    • Empire Holdings, Inc.
    • n/a

     

    Source S&P Capital IQ as of 4/6/2022 and PCE Proprietary Data

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    Data Assumptions

    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.

    Glossary

    EBIT - Earnings Before Interest and Taxes
    EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
    LTM - Last Twelve Months
    TEV - Total Enterprise Value

    Sources:

    1. Berger, Paul. “Southern California’s Ports Are Catching Their Breath During Import Lull.” Logistics Report, The Wall Street Journal, 10 Mar. 2022.
    2. Sindreu, Jon. “Supply-Chain Obsession Is a Prime Day Gift for Amazon Air.” Heard on the Street, The Wall Street Journal, 16 Mar. 2022.
    3. Colias, Mike. “Ford Creates Separate EV, Gas-Engine Divisions in Major Overhaul.” Autos Industry, The Wall Street Journal, 2 Mar. 2022.
    4. Paris, Costas. “Why the World’s Biggest Ocean Shipping Lines Are Buying Cargo Planes.” Business, The Wall Street Journal, 4 Feb. 2022.
    5. Berger, Paul. “White House Pushes Supply-Chain Operators to Share Data” Logistics Report, The Wall Street Journal, 15 Mar. 2022.

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