GENERAL TRENDS
Logistics Industry Outlook and Observations
Despite macroeconomic tailwinds, the global logistics market was strong in 2023 as it reached a value of $8,960.0 billion and is projected to grow at of CAGR of approximately 10.7% between 2023 and 2030 to reach a value of approximately $18,230.0 Billion
Temporary Geopolitical events continue to present challenges for the Transportation & Logistics market
Following the Israel-Palestinian War in late 2023, Yemen’s radical Islamic group, Houthis launched attacks against ships in the Red Sea. The rise of attacks launched by Houthis has diverted ships away and led to an increase in freight costs of 40%
Geopolitical events have put strains on the supply chain ecosystem, however, increased consumer spending and increased consumer demand indicate an improving market
Consumer spending showed resiliency through 2023 supported by an increase in household income and moderating inflation. Household income increased by 6.9% from 2022 to 2023 in part due to strong labor market wage growth. The increase in disposable household income coupled with cooling inflation allowed for an increase in consumer spending
Disruptions in the global supply chain ecosystem have shifted trade away from the East Coast and Gulf Coast towards the West Coast
In 2023, Southern California Ports reported an increase in the number of imports to 31% upward from 17% in 2022. East Coast ports such as Georgia’s Port of Savannah and the Port of the New York and New Jersey showed a decline in the number of imports
The resolution of long-running contracts with dockworkers helped improve labor relations. Improved labor relations were one of the key factors in driving trade away from the East Coast to the West Coast
Decreased volume demand for intermodal services have led to major decisions by industry leading brands. In late February, the Norfolk Southern Railway decided to halt intermodal service from the Southern Ports to Midwest Destinations such as Chicago. This cancellation points to changes in the North American Transportation & Logistics Market
The demand for greater efficiencies in the supply chain coupled with the use of obsolete technology will drive the demand for innovative technologies such as generative AI
In 2023, Geotab launched a generative AI platform to serve as a copilot on fleet deliveries. The Generative AI Platform “GeoTab Ace” was designed as a copilot for fleets to reduce time and gain insight by analyzing fleet data. The platform was introduced at Geotab Connect; the company’s annual convention hosted in Las Vegas to a limited number of people
Increased pressure for lawmakers has put fleets and OEMs under immense pressure to drastically redesign their products to reduce their carbon footprint
M&A ACTIVITY
North American Transportation and Logistics M&A
DEAL SPOTLIGHT
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The opinions expressed herein are those of 555 Capital Advisors. There is no guarantee that any predictions/projections as to certain market activity or events will come to fruition or past market or transaction performance referenced within will yield the same results as transactions previously conducted by 555 Capital Advisors.
