LOGISTICS CONSULTING SERVICES
THE EVOLVING T&L LANDSCAPE
The transportation industry has shown secular trends over the years that show levels of outsourcing growing at more than 3 times the rate of GDP. This industry showed strong sustainability through the pandemic with stronger margins, higher volumes, and boosted EBITDA across regions and sectors. Levels of automation and digitization have grown rapidly especially since the pandemic as the remote work environment became a necessity for most organizations. Like many other industries, the transportation space experienced quite a bit of disruption due to COVID. Fortunately, Bravura Partners has among its senior leaders one of the most reputable experts in the arena of logistics, both pre- and post-pandemic.
TRANSPORTATION INDUSTRY MARKET REVIEW
The Global Transportation Industry Market reached US$7.31 trillion in 2022, and is expected to reach US$11.1 trillion by 2030, growing with a CAGR of 5.4% during the forecast period 2023-2030. The global transportation industry is driven by various factors such as urbanization and population growth, rising demand for online shopping through e-commerce platforms, and infrastructure development.
Furthermore, investments in transportation infrastructure, such as roads, railways, ports, and airports, play a vital role in expanding the transportation industry. Governments and private entities are investing in infrastructure projects to enhance connectivity, reduce congestion, and improve overall transportation efficiency.
DIGITAL FREIGHT MARKET
Bravura brings deep domain expertise in this growing and demanding space in the industry. This includes operating companies that leverage robust tech stacks as well as SaaS companies that are focused on solutions framework. Digital Freight Matching will likely drive efficiency and superior freight unit economics. Digital Freight Brokerages are online marketplaces that connect shipping entities & truckers via technology and mobile clients. Market fragmentation in carriers and brokers present a unique opportunity for digital freight companies to source customers and capacity online making cost of operating more cost-effective.
ASIA-PACIFIC MARKET
Asia-Pacific holds a major share of the global transportation industry market, while countries like China and India hold more than two-thirds at the regional level. China, in particular, has a massive transportation industry market due to its large population, extensive manufacturing base, and strong export-oriented economy. The country has invested heavily in building an extensive network of roads, railways, airports, and ports to support its domestic and international trade.
INTERNATIONAL FREIGHT FORWARDING
The world of freight forwarding is constantly evolving, driven by global economic shifts, technological advancements and changing customer expectations. Five trends that we see emerging in this sector that will shape future of freight forwarding in 2024 and beyond:
- More capacity, but with demand volatility
- Climate changes and geopolitical tensions loom large
- Waves of consolidation
- A true test of commitments to sustainability
- Digitization as a must have
2024 will be a year of significant challenges to freight forwarders. They will have to withstand economic uncertainty, political instability, and technological disruption. At the same time there is potential to benefit from new opportunities, again in the realm of sustainability & technology. Through strategic investment, careful planning and prioritizing resilience, freight forwarders can help maximizing their potential for success.
A LOGISTICS M&A PERSPECTIVE
A successful outcome is predicated on running an efficient process and targeting the most synergistic market map to drive valuations and better deal structure. In today’s market when deal flow is rather muted, good assets always drive interests from strategic as well as financial buyers. Bravura has deep relationships with strategic and financial buyers, and we believe in running a laser focused approach. The firm takes a proactive approach to handling what could be potentially some sticky issues like Net Working Capital Adjustments or add-backs to ensure successful closing. Bravura also champions a candid approach when advising on expected value and deal structure. This is a unique approach when compared to the competition, which tends to tell a potential client what they want to hear versus what they need to hear.
For an excellent resource on Logistics, please check out this article from the PwC about the future of the Logistics industry.
