Trucking Consolidation Expected
Expect to see more trucking companies looking for growth opportunities throughout 2014. Last year’s merger and acquisition activity ended on a high note, with a 57 percent increase over 2012, according to PricewaterhouseCoopers. The market looks ripe for more deals to come.
Unlike the railroads and airlines, which are both highly consolidated, the trucking industry remains fragmented. Now that the market has turned around, companies are looking to increase efficiency through growth.
The recent acquisition of Central States Trucking by Forward Air Corp. in the early part of 2014 is a good example of how carriers are benefitting by taking on other companies. With CST’s seven terminals and 500 employees, Forward Air now has the opportunity to enter new markets and expand its customer base.
Good loan opportunities from the banks are making it easier for those companies that want to grow to access the capital, and good market value is making it enticing for companies that want to sell to do it now while the market’s hot.
“The economy is up, shipments are up, and demand for fleet services is up,” says Max Safavi, managing director for Allegiance Capital Corp. “If you own a well-managed, well-positioned fleet, now would be the perfect time to begin the sales process.”