We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Investors flock to freight brokerages despite economic outlook

Investors flock to freight brokerages despite economic outlook

Mergers and acquisitions of brokerage firms continue even as cooling e-commerce tamps down transportation demand, Capstone Partners says.

brokers Screen Shot 2022-07-28 at 1.24.36 PM.png
July 28, 2022
Ben Ames
No Comments

Merger and acquisition activity in the freight brokerage sector continues to be “overwhelmingly positive” despite economic turbulence and warnings of a transportation recession, as brokers ride the momentum of white-hot logistics activity kicked off by the pandemic, a market report says.

Judging by busy transaction activity in early 2022, demand is particularly high for acquiring companies with hybrid broker models that combine brokerage and distribution, according to the report from Capstone Partners, a Boston-based investment banking firm. Specifically, brokers with an asset-based arm, proprietary technology, and unique offshore strategies have seen heightened demand, Capstone said in its “July 2022 Freight Brokerage Market Update.”

The activity comes in the face of steady warnings of a recession in the trucking and freight brokerage markets as the frantic pace of pandemic e-commerce growth reverts to historical levels.

“Signals in Q2 2022 potentially indicate activity normalizing as tender rejection rates have shifted and spot rates have fallen from their record highs,” Capstone said in the report. “However, in contrast to the rumblings of recession, consumer demand presents a strong case for a positive outlook on the future for third party logistics (3PLs). Even as supply chain challenges ease, brokers have been highlighted as key players in the future of logistics.”

While those cloudy forecasts may spook some “generalist” private equity firms away from making offers to buy brokerage firms, more experienced investors see the trends simply as evidence of natural market cycles, the report said.

Recent examples of specific deals include the private equity-owned trucking firm Transport Investments Inc., which in March acquired SmartWay Transportation LLC, a multi-modal freight brokerage and transportation management company. And in April, logistics service provider Ascent acquired a majority stake in the brokerage Central Minnesota Logistics. 

Two much larger deals happened in 2021, when private equity firm The Jordan Company L.P. (TJC) acquired the freight broker and third-party logistics provider (3PL) Echo Global Logistics Inc. And online trucking broker Uber Freight bought the Texas third party logistics provider (3PL) and fellow broker Transplace.


Discover how macroeconomic trends are impacting M&A activity, what business models are garnering interest from acquirers, and an exclusive interview with Richard Piontek, CEO of Direct Connect Logistix, in our latest #FreightBrokerage M&A Update:https://t.co/SPIP5q4WIo

— Capstone Partners (@capstone_ibank) July 14, 2022
Trucking
KEYWORDS Capstone Partners
    • Related Articles

      Truck builders enjoy “healthy” 2023 outlook despite economic headwinds

      Material handling outlook strong despite economic slowdown

      Transplace Shipper Symposium to Focus on Supply Chain Innovation & the Economic Outlook

    Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly?s sister publication, DC Velocity.

    Recent Articles by Ben Ames

    USPS to skip rate hike this winter peak season

    J.B. Hunt buys brokerage operations of BNSF Logistics

    GXO buys e-commerce 3PL PFSweb for $181 million

    You must login or register in order to post a comment.

    Report Abusive Comment

    Most Popular Articles

    • Positive drug tests in U.S. workforce rise to 20-year high as marijuana is legalized

    • Wabash opens trailer manufacturing facility in Indiana

    • Six defining challenges of omnichannel fulfillment

    • Postal advocacy group says “excessive” July 9 stamp price hike will hurt consumers

    • CPKC and CSX buy rail assets from Genesee & Wyoming

    Featured Video

    8757b894 244c 4429 b5d8 e6df7b479d82

    Penalties for Wood Packaging Material Violations

    Viewer Contributed
    Our Services Include: Customs Broker Denver Freight Forwarder Denver Global Logistics Denver Cargo Insurance Denver Customs Bond Denver Customs Clearance Denver Customs Duty Denver Isf Filing Denver More details: Phone : 281-445-9779 Email: info@gallaghertransport.com Website: gallaghertransport.com

    FEATURED WHITE PAPERS

    • Five questions to ask before electrifying your indoor forklift fleet

    • Operator assist system myths busted

    • Three layers of forklift safety: Promoting operating best practices

    • The Complete Guide to Automated Packaging

    View More

    Subscribe to Supply Chain Quarterly

    Get Your Subscription
    • SUBSCRIBE
    • E-NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

    Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing