Consultant Insight: DB Schenker may not be for sale, but other freight forwarders may be

After gobbling up UTi Worldwide in 2016 , Panalpina in 2019 and Agility’s Global Integrated Logistics unit in 2021 , global freight forwarder DSV is rumored to be eyeing DB Schenker in a highly disruptive market ripe for acquisitions. DSV chief financial officer Jens Lund said last week in an interview with trade magazine ShippingWatch that if DB Schenker is listed for sale, DSV would consider it. [caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] “Rumors about DB Schenker getting sold have been in the market for years now,” DB Schenker fired back in a statement. “Our very strong financial results and the upcoming federal elections in Germany give more fuel for such speculations.” Indeed, rumors of a DB Schenker sale date back to at least 2009, when Klaus-Michael Kuhne, majority shareholder and honorary chairman of Kuehne+Nagel, told Reuters that “the land transport of DB Schenker is a pearl,” adding that he had a “concrete” interest in buying but did not think it would be possible to acquire it separately. German-state-owned rail operator Deutsche Bahn acquired Schenker from logistics provider Stinnes AG in 2002. However, economic upheavals, a volatile political environment and the rail operator’s rising debt continue to fuel speculation that it will sell off a number of its divisions, including DB Schenker. In 2015, German newspaper Handelsblatt reported that Deutsche Bahn hired an investment bank to find a buyer for its subsidiaries Arriva and DB Schenker Logistics. Rumors of DB Schenker’s potential acquisition by DSV first emerged earlier this year. Any potential sale of Schenker at this point seems unlikely given the strength of Schenker’s latest financial results. In the first half of 2021, the company reported total revenues up 26.3% year over year to €10.7 billion (US$12.6 billion). Compared to the same period in 2019, total revenue increased by 25.4%. Adjusted EBITDA increased 61% YoY to $1.08 billion, and compared to the same period in 2019, it increased 83.6%. On the hunt for large acquisitions According to consulting firm PwC, the number of acquisitions within the logistics and transportation space declined 28% during the first half of this year through May 15However, there was an 86% growth in terms of deal value for the transportation and logistics market. Pandemic-driven disruption in the supply chain market, along with increased government focus on infrastructure spending, drove a good bit of the activity as acquirers looked to expand into new markets and strengthen geographic footprints. Cross-border deals represented 64% of total deal value and 30% of total deal volume in H1 2021. This was a considerable increase compared to 29% of deal value and 27% of deal volume in H1 2020, and 17% of deal value and 25% of deal volume in H2 2020. PwC noted that companies are looking to expand and diversify their supply chains as a hedge against disruption. In addition, companies are adapting to changing consumer purchasing behavior, “which will require e-commerce marketplaces and quick delivery windows.” Among the more significant acquisitions this year was Uber Freight’s surprise acquisition of Transplace last month. “We believe there’s a large opportunity to be the preferred end-to-end logistics partner for shippers,” Lior Ron, head of Uber Freight, said during the company’s second-quarter earnings call. “Eighty percent of shipper decision-makers manage both full truckloads as well as last-mile shipping, and almost 60% of survey customers have last-mile needs.” Significant acquisitions announced earlier this year — DSV’s acquisition of Agility Logistics and Kuehn + Nagel’s acquisition of Apex Logistics — demonstrate an expansion of a different kind: geography. As reported in an earlier Air Cargo World article , acquisitions of large-scale and more targeted logistics businesses are supportive of growth in cross-border airfreight and other shipments at a time with increasingly complex customs processes. Expect more acquisitions to be announced this year. DSV will likely find other targets to pursue as it races to become the world’s largest freight forwarder.

Consultant Insight: DB Schenker may not be for sale, but other freight forwarders may be

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