Perishables Power Play: How forwarders are adapting to e-commerce disruption
More M&A on the horizon?
Although it may be some time before Amazon’s entry into the field can rival the logistics networks of the leading global forwarders, its mere presence will still likely to lead to more M&A activity in 2018 and beyond. Last fall, when Deutsche Post-DHL Group discussed its third-quarter numbers, CEO Frank Appel hinted to investors that he was considering expansion into the grocery e-commerce market, saying the company was “getting more and more traction there.” DP-DHL currently operates a medium-sized grocery e-tailing operation in Germany called “Allyouneed Fresh.”
But on the forwarding end, most of the M&A activity appears to be limited to a handful of companies. “If you look at companies seeking a true global network, really there’s only two primary forwarders currently in the market – that would be K+N and ourselves,” said Panalpina’s Wells. Panalpina, which has arguably been the most active in the perishables M&A scene, “has been very strategic – some smaller acquisitions, some bigger,” Wells added. “The mergers are really being done to create a true perishables network that allows us to offer a potential customer – be it at origin or destination – an end-to-end solution. Panalpina truly is in a good position where we can offer a one-stop shop.”
“It can be expected that the segment will grow in the coming years, bringing along different requirements regarding the transportation of food,” said the K+N perishables expert. “The quality level of the cold chain, for example, will have to be very high to limit any food safety risks.”
Speaking shortly after announcing the company’s second-quarter results last July, K+N CEO Detlef Trefzger remarked that K+N’s market share in the perishables sector was “extremely low,” adding that the sector was fragmented and would likely see more consolidation in the coming months. “The perishables market is growing,” Trefzger added. “Therefore there will be other targets out there we will look at and will for sure try to complement our network where we feel we need additions and can’t build it as fast, reliably and organically ourselves.”
Food for thought the next time you dip into a zesty bowl of guacamole. Though it may taste “fresh,” it may well have come from the other side of the world, thanks to airfreight.
