Sunday, September 9, 2012

US logistics providers look to expand their reach in the European market

Despite global economic woes, logistics mergers and acquisitions are still occurring.  As Europe’s economic crisis deepens, opportunities are on the rise. For example, the intra-Europe road market appears to be a particular target for such activity – especially for US logistics providers that are either in search of new geographic regions or in expanding their market reach in these regions.

Among the largest deals so far this year has been the UPS – TNT deal. Although TNT offers a variety of services, TNT’s intra-European road network was of special interest to UPS due to its desire to expand its market share in this market. Likewise, FedEx is also looking to expand its footprint in the intra-European market. It recently acquired Polish courier provider Opek and French express provider TATEX.

While both of these acquisitions appear to be focused on expanding express/small parcel offerings, the latest acquisition maybe a bit different in its strategy. CH Robinson has had a presence in Europe since 1993 and through the years expanded its freight forwarding network across the region via acquisitions. Last week, C.H. Robinson acquired Polish freight company Apreo. Apreo primarily provides truckload services – dry van, liquid and dry bulk and temperature controlled. In fact, temperature-controlled transport has been of special interest to C.H. Robinson. In June, the company opened its Rotterdam office specializing in temperature controlled logistics. C.H. Robinson noted at the time that temperature controlled transport was one of the fastest growing business segments for the company on the European continent. Besides truckload transport, Apreo also offers warehousing and air and ocean services. According to Bryan Foe, president of C.H. Robinson Europe, "This acquisition expands C.H. Robinson's presence in Europe and supports our goals to strengthen our capabilities in our core business and further diversify our modal offering, both of which benefit our European and global customer base."

This diversification of modal offering that Mr. Foe mentions is probably the key to its strategy. This was conceivably a good move on C.H.Robinson’s part despite the current situation of the European road freight market. Stubborn high fuel prices and the economic situation have resulted in declining rates and increasing capacity. Still, according to C.H. Robinson’s CEO, John Wiehoff, "We are taking a long-term approach towards Europe and feel now is a good opportunity to increase our commitment to the region. The agreement to acquire Apreo supports our strategy of making continued investments in our business within the continent."