Transportation & Logistics Services Industry Update Q2 2022
Read more about M&A trends and activity in this sector
Transportation & Logistics Services Sector Update
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Transportation & Logistics Overview
Global transportation and logistics industry participants include third party logistics, freight management, and transportation service companies serving variety of end-markets. Key public industry players are categorized by subsectors as follows:
| Sub-Sector | Public Revenue / EBITDA Multiple(1) | Description | Key Select Industry Leadership | |
|---|---|---|---|---|
Logistics Providers
| 1.48x/8.7x | Third-party logistics providers offering warehouse management, order fulfillment, and shipment services |
|
|
| Marine | 1.59x/5.1x | Ocean and marine freight transportation and logistics services |
|
|
Rail and Rail Services
| 4.42x/13.9x | Rail-based freight transportation services |
|
|
| Trucking | 1.47x/6.3x | Companies offering truckload transportation services |
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Sector Perspectives: The U.S. Transportation and Logistics Market
- Recent supply chain disruptions, coupled with the prolonged impact of the COVID-19 pandemic, have strained transportation and shipping networks dating back to the first half of 2020
- Transportation and logistics companies continually need to meet the challenge of ongoing supply-chain issues. Labor constraints and capacity at ports in China, and elsewhere, are unable to meet current demand requirements
- Approximately 11% of shipments from Asia arrived on time in North America this month, down from 18% in May 2021 and 59% for the same month two years ago
- While Class 8 truck orders, which indicate market confidence and the need to scale capacity, were 56,500 units in Sep-2022, significantly up from 21,400 units in last month, build rates continue to be adversely affected due to bottlenecks and labor shortages faced by suppliers in the industry.
Class 8 Truck Orders (January 2016 –September 2022)
- To alleviate supply chain constraints, the U.S. federal government formed the Supply Chain Disruptions Task Force, jointly led by the Department of Transportation (DOT), the Department of Commerce, and the Department of Agriculture. Actions taken to augment the nation’s supply chain include:
- Maintain operations for ports 24/7
- Reduce long-dwelling containers, working to increase freight rail services, and alleviating workforce constraints
- Port Infrastructure Development Program (PIDP) Grants: DOT announced $450 million of funding available for ports across the country for infrastructure upgrades such as constructing new berths, restoring docks, and extending rail lines
- DOT launched a Trucking Action Plan, a two-fold effort focused on the recruitment of truck drivers as well as improving the quality of existing driver jobs in order to mitigate low retention rates
- The U.S. Logistics Manager’s Index (LMI) is a combination of eight key logistics metrics that indicate the contraction / expansion of transportation activity. A reading of 50%+ indicates that logistics is expanding
- The LMI decreased to 61.4 in Sept-2022, up from 59.7 in Aug-2022, indicating an ongoing market shift toward more sustainable, moderate levels of growth
Logistics Manager’s Index in the U.S.
We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.
Footnotes:
- Valuation Multiples represent Enterprise Value to LTM Revenue and LTM EBITDA at 7/31/2022
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Transportation & Logistics Services Sector Update
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Stephen Guy
Managing Director, KPMG Corporate Finance LLC
Stephen Guy
Managing Director, KPMG Corporate Finance LLC