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M&A in the E-commerce Logistics Landscape


M&A in the E-commerce Logistics Landscape

With the boom in e-commerce post-pandemic, incumbent logistics players have been making mergers and acquisitions to improve their e-commerce offerings in a growing market.

Some of UPS’ most recent acquisitions are predominantly focused on strengthening UPS’ e-commerce last-mile services. For example, in May 2022 UPS acquired last-mile technology provider Delivery Solutions, a software-as-a-service delivery orchestration platform which enables retail omnichannel delivery options. According to UPS, Delivery Solutions’ leading technology helps merchants offer their customers more flexibility and an engaging online purchasing experience as they increasingly look for an experience-driven omnichannel strategy.

UPS also acquired Roadie, a technology platform that enables local same-day delivery with operations throughout the U.S., in 2021. Roadie often provides service for shipments not compatible with the UPS network because of their size and perishable nature, and often because they are in shopping bags without the packaging required to move through the UPS system.  The Roadie technology platform is purpose-built to connect merchants and consumers with contract drivers to enable efficient and scalable same-day local delivery services nationwide.

Similarly, DHL Supply Chain has set out to improve and scale its e-commerce fulfilment services through several acquisitions. In 2022, DHL acquired a majority stake in Monta, as well as a minority stake in Link Commerce.

DHL’s minority acquisition of Link Commerce expanded the company’s reach into Africa. Link Commerce offers a white-label solution for doing online-sales in emerging markets. Retailers can plug into the company’s e-commerce platform to create a web-based storefront that manages payments and logistics.  Through the acquisition, DHL hopes to build a broader client base globally using a business built in Africa. Sellers can also use the Link Commerce platform to create a web-based storefront that manages payments and logistics. This is particularly valuable to sellers looking to sell to African consumers as Link Commerce will handle the payment hurdles in the region, allowing US and UK sellers to grow and scale. In 2019, Link Commerce brought more than 200 US and US sellers online to African consumers in 34 countries. Link Commerce now functions for DHL under its e-commerce platform DHL Africa eShop.

Furthermore, DHL’s majority acquisition of Monta was intended to create a partnership to serve small and mid-sized webshops in e-fulfillment and online sales. Monta, located in Netherlands, has a workforce of 1,000 people and 14 fulfilment locations. At the time of its initial announcement of partnership with DHL, Monta served 1,500 SME e-sellers through a range of software-enabled fulfilment services and warehouse management software. Through this acquisition, DHL looks to widen its customer base to include more SMEs by utilising both Monta’s e-fulfilment capabilities and DHL’s existing international logistics infrastructure.

Overall, incumbents have been throwing money into acquisitions to gain market share of a rapid growing e-commerce vertical, but there are questions around whether this will continue into 2023.

There have been conflicting reports regarding whether M&A activity in the logistics sector has been slowing during 2022. According to BDO M&A activity in the UK, the largest e-commerce logistics market in Europe, significantly slowed in Q3 2022 as companies assessed the impact of the war and soaring inflation. Several sector bankers have also cautioned that logistics M&A is slowing significantly in the North America region. This has also seen reduced funding for e-commerce start-up companies, which incumbents often look at acquiring.

As the global economy enters a pronounced slowdown and inflation rises at historic rates, it remains to be seen whether M&A activity in this market will continue at the same pace as the beginning of the pandemic.


DHL Global Forwarding and Air France KLM Martinair Cargo further expand Sustainability Cooperation

At the Netherland-America Foundation’s (NAF) prestigious annual ball on Friday, 18 November in New York, Air France KLM Martinair Cargo (AFKLMP Cargo) presented its Sustainability Award to DHL Global Forwarding. This award, received by DHL Global Forwarding’s Americas CEO, Tim Robertson, is not only a clear sign of appreciation for the partnership between AFKLMP Cargo and DHL, but also important recognition of DHL Global Forwarding’s sustainability leadership in the logistics sector.

Earlier this year, DHL Global Forwarding and Air France KLM Martinair Cargo announced a groundbreaking agreement under which DHL purchased 33 million liters of Sustainable Aviation Fuel (SAF) from AFKLMP Cargo for the period 2022-2024.

Both parties have now agreed to further intensify this partnership by expanding their focus on SAF to include the collaborative development of other sustainability initiatives. Both parties possess valuable knowledge and expertise. Joining forces in this way allows them to create synergies that will enable decisive action to be taken to increase the sustainability of air-freight chain logistics.

In 2020, Air France KLM Martinair Cargo was the first air cargo carrier to launch a fully customer-oriented Sustainable Aviation Fuel (SAF) program. More than 40 companies from all over the world have now joined this program.

In October, AFKLMP Cargo introduced another novelty with the goSAF option, which allows customers to reduce their carbon emissions per booked shipment by making a direct investment in SAF. This new feature in AFKLMP’s myCargo booking portal, seems to be being widely embraced. In the first week alone, after the feature was introduced, an SAF contribution was added to more than 1000 bookings.

Air France-KLM sustainability commitment

In October 2021, the Air France-KLM Group committed to having its decarbonization trajectory validated by the Science Based Targets initiative (SBTi), ensuring that its targets are in line with the 2015 Paris Agreement to achieve net zero emissions by 2050.

Air France-KLM’s decarbonization trajectory includes an ambitious plan to renew the Group’s airline fleet with next generation aircraft emitting 20%-25% less CO₂.

Searching for greater efficiency in its operations, favoring more direct routes and applying procedures that limit fuel consumption (lighter aircraft, single-engine taxiing, continuous descent) are all part of AFKL’s sustainability efforts. Air France and KLM have set themselves the target of making their ground operations carbon neutral by 2030.

In addition, Air France-KLM is mobilizing the entire sector and is committed to developing innovative solutions for aircraft design, maintenance, engines and synthetic fuels, which will gradually lead to carbon-free aviation.

Deutsche Post DHL Group sustainability commitment

As a division of Deutsche Post DHL Group, DHL Global Forwarding has committed to achieving net zero transport-related emissions by 2050. To achieve this mission DHL recently introduced the GoGreen Plus service. Following the insetting approach, emissions are reduced by replacing the amount of conventional fossil fuel needed with sustainable fuel. Customers can easily pick and choose which parts of their supply chain they want to truly decarbonize. The GoGreen Plus Service can be easily added while booking online, e.g., an air freight shipment via the myDHLi customer platform. The launch of Deutsche Post DHL Group’s decarbonized range of GoGreen Plus services is a crucial milestone in making the global logistics industry greener and more sustainable.

In addition, DHL assesses the sustainability efforts of its partners through the GoGreen carrier evaluation program, which gives preference to carriers with strong environmental performance. Air France KLM Martinair is one of DHL Global Forwarding’s key carriers and has been one of the top three GoGreen carriers for many years.


DHL Distribution Center Beefs Up Stafford Workforce with 577 New Jobs

Stafford County’s Venture Business Park will soon be the home of a new 500,000 square-foot high-bay distribution center for DHL Supply Chain. The global logistics provider was confirmed to invest a total of $72 million in the project for its Real Estate Solutions unit at Stafford County’s Venture Business Park. This addition will continue supporting DHL Supply Chain’s initiatives in real estate and logistics engineering for the development of turnkey warehousing solutions.

“This significant investment and the addition of 577 new jobs come at a critical time when we are focused on rebuilding our economy and getting Virginians back to work,” he said. “The ongoing pandemic has underscored the value of supply chain management and delivery services during times of crisis. With our central East Coast location and advanced transportation infrastructure, our Commonwealth offers unparalleled advantages for businesses, and we are proud to support the company’s new high-tech operation in Stafford Country.”

In an announcement this week, Governor Ralph Northam confirmed the win for the project after competing with Maryland. Collaboration between the Virginia Economic Development Partnership and Stafford County ultimately secured the success for the state, along with a $1.7 million grant from the Commonwealth’s Opportunity Fund for the development of the facility. Additionally,  the Virginia Jobs Investment Program will support education and training efforts for the facility’s employee pool, contributing funding and services to further develop the region’s added workforce.

“Virginia has strong transport links catering for all modes of transport, access to a high-quality workforce, and an above-average level of GDP per capita, which contributes to an attractive investment environment for DHL Supply Chain’s Real Estate Solutions unit,” said Carl DeLuca, Head of Real Estate Americas for DHL Supply Chain. “We are excited to build on the company’s presence in this market, and are grateful to Governor Northam and his team, as well as the local authority of Stafford County, for the support they have provided to DHL on this project. We look forward to developing a solution that will deliver 577 jobs to the region and further enhance the competitiveness and attractiveness of Virginia as a logistics hub.”

“On behalf of our entire Board, we are eager and excited to have DHL invest in Stafford, and we look forward to a long-term partnership with them in our community,” said Meg Bohmke, Chair of the Stafford County Board of Supervisors.

Gartner Positions DHL as Leader in 2019 Magic Quadrant list for 3PL

Global logistics contract provider, DHL joins many of its own customers on the 2019 Magic Quadrant list. The company’s impressive scale and seamless solutions integration for global clients contributed to earning the “Leader” title in the 2019 list.

“Predictability is critical in this business, and our customers count on us to maintain a level of unmatched operational excellence in everything we do,” said Scott Sureddin, Chief Executive Officer, DHL Supply Chain North America. “We believe that being named a Leader in the Magic Quadrant again this year is a testament to our ability to think strategically and operate exceptionally to drive continuous efficiency improvements for our customers across verticals.”

DHL Supply Chain was 1 of 19 companies surveyed for Completeness of Vision and Ability to Execute. DHL maintained the furthest position in Completeness of Vision, representing some of the most prominent North American 3PL experts. Roughly 70 percent of DHL Supply Chain clients were named in the 2018 list (Gartner, The Gartner Supply Chain Top 25 for 2018, Stan Aronow et al., 16 May 2018).

“These providers enable customers to outsource, either completely or partially, their logistics operations to external specialists. Many companies view logistics outsourcing as an effective strategy primarily to reduce costs, but more and more customers are seeking innovative solutions that can improve process and service as well.”

Source: DHL

South Carolina Confirmed for DHL Commerce Park

Q1 2020 is the official completion date set for one of the three buildings to make up the DHL Commerce Park in Dorchester County, South Carolina. The company confirmed last week the $100 million investment will comprise of three buildings making up the entirety of DHL Commerce Park, creating a massive warehouse and distribution park spanning 1.7 million square feet to support efforts focused on port-related logistics.

“We have seen significant growth in this area of the country and customers are even asking us to evaluate opportunities in South Carolina specifically,” said Steve Hess, Vice President, Real Estate Development, DHL Supply Chain. “With that in mind, we got ahead of the curve to offer premier facilities in one of the hottest emerging markets in the country.”

An estimated 450 jobs are projected to come from the investment as the completion and opening of DHL Commerce Park will be done in phases. DHL Real Estate Solutions is a standalone product directly involved in the production of the project by providing specific real estate solutions.

“South Carolina Ports Authority is seeing significant distribution center and warehousing activity in our region, driven by port users who rely on our marine and inland facilities to handle growing import volumes bound for consumers across the Southeast,” said Jim Newsome, SCPA president and CEO. “DHL Supply Chain will play an important role in supporting the logistics needs of multiple port-related business segments, and we look forward to the opening of their new facility.”

“With a favorable geographic location and robust port and infrastructure assets, South Carolina offers unparalleled global connectivity,” said Bobby Hitt, South Carolina Secretary of Commerce. “This $100 million investment by DHL Supply Chain is a testament to our unique ability to move products around the world, and I congratulate this great company on this tremendous announcement.”

Supply Chain Professionals: DHL Supply Chain

Deutsche Post DHL Group subsidiary, DHL Supply Chain, continues making global news headlines through newly implemented green fleet, medical express service expansions, and hiring and retention strategies. More importantly, however, is the company’s expert analysis by taking a closer look into the crystal ball of supply chain trends for 2019. Back in January, the leading American contract logistics provider shared a detailed report highlighting emerging technologies, trends and complexities to come this year.

“Supply chain complexity has been growing for years and several of these trends threaten to create even more complexity,” said Scott Sureddin, CEO of DHL Supply Chain, North America. “However, we are also now seeing key technologies reach a level of maturity that enables them to be used to better manage complexity while also increasing productivity and reducing costs. That makes 2019 a very exciting year in the continuing evolution of the industry.”

This proactive approach makes DHL Supply Chain one of the top supply chain companies on a national and global level. With emerging complexities on the supply chain horizon, the company strategically prepares its operations by acknowledging and carefully evaluating all avenues that make up successful supply chain operations. Whether it be the role technology and automation play, or addressing the talent gap, DHL Supply Chain displays a thorough understanding of what it takes to maintain success in an unpredictable market.

In November, the company announced a $300 million investment to support implementing emerging technologies to not only better enable their own diverse customer base but to also support their customers’ client base. The integration strategy addressed a variety of customer roadblocks within the supply chain, identifying complexities and capacity restraints specifically pertaining to e-commerce and omnichannel. Out of 430 North American facilities, 350 were part of the emerging technology implementation. Technologies integrated were dependent on customer needs and internal innovation research.

“This investment is about a holistic view of emerging technologies that enables our customers to achieve their growth and profitability goals,” Sureddin says. “Our customers’ needs are not homogenous as each business and segment has unique challenges and levels of maturity. Therefore, it is important that our customers can benefit from our experiences and expertise with a variety of emerging technologies.”