Strong Year in 3PL Industry Growth Shows Promising Opportunities
Last Mile Logistics Group, Inc. announces its intent to acquire local providers of logistics services, focusing first on the Mid-Atlantic region. LMLG has already purchased Chesapeake Logistics, a Mid-Atlantic regional carrier that provides home delivery of heavy consumer goods, delivering televisions, appliances, furniture, bedding and other heavy and high value merchandise. Brian Flood, President of LMLG, cited a recent PriceWaterhouseCoopers report (http://www.pwc.com/extweb/pwcpublications.nsf/docid/56017A2797D180C5852573E8007B3D3D) that summarized the growth in mergers & acquisitions activity in the transportation and logistics industry. The report notes that despite the tightening credit market, a total volume of 1,291 deals in 2007 was the highest in the past 20 years.
Flood pointed out, “Third party logistics companies are attractive targets to invest in, and despite the cooling marketplace, logistics remains a high-growth field that performs well. Investors are realizing the benefits from logistics consolidation.” A recent article by Jonathan Ives of the Investment Banking Group of National City Capital Markets (http://www.inboundlogistics.com/articles/knowledge/knowledge0707c.shtml) notes that third party logistics (3PL) businesses have attracted interest from private equity (PE) investors as a result of high growth rates and limited capital investment required.
Flood continued, “The last mile sector of the 3PL industry, focused on getting products to the final destination, is highly fragmented. There are tremendous opportunities for greater market density, resource efficiencies, last mile technology applications and brand creation. Last Mile Logistics Group is acquiring targets that build strong brand presence, like Chesapeake Logistics, and is moving to take advantage of those opportunities.”