Transportation and Logistics
Revenue for the Transportation and Logistics sector has risen in the recent years, as expansion in manufacturing and greater discretionary consumer spending has propelled higher freight volumes. Rising volume for goods and the accumulation of inventory requires more trucking companies to move goods across the country. This has contributed to an increased need for transportation services. Moreover, gas price volatility steered many consumers toward public transportation. Government subsidies and incentives also lead to increased activity in the Transportation and Logistics sector, while providing favorable operating conditions. Operators continue to thrive in this challenging environment.
Value of Closed Domestic M&A Transactions ($mm)
Sector Performance vs. National GDP
The sector is anticipated to continue seeing similar trends recur in the future, especially as consumer spending continues to increase. However, government agencies are placing restrictions limiting the number of working hours of truckers, which reduces the quantity of shipments. However, with owner operators accounting for over 90% of the industry, consolidation in the industry may follow. Many larger Transportation and Logistics companies are actively pursuing acquisitions. Operators in the sector have also increased their fleet of trucks, heightening the industry capital requirements. With the vast resources and capabilities at reach independent trucking companies are also likely to grow and contribute to the sector’s growth.