Above the Fold: Supply Chain Logistics News (July 9, 2021)

By Adrian Gonzalez

What do you do when the “check engine” light comes on and your car won’t go more than 20 mph on the highway?

That was the predicament my oldest daughter found herself in on July 4th as she was driving back home from a visit with friends in Vermont. To make a long story short, she checked herself into a hotel, I drove 7 hours roundtrip the next day to get her, and the car was towed to a garage to get fixed. It’s still there in VT. Waiting for parts.

Just another reminder that things don’t always go according to plan. Crap happens and you deal with it the best you can. In our case, we spent some quality father-daughter time at a coffee & bagel shop in Shelburne, VT. She told me about her crazy weekend and I told her about ours, and together we wrote another chapter in our memory book.

A chapter neither of us expected to write that day.

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Although my old Honda is stuck in low gear, what continues to speed along is everything related to supply chain and logistics. Here’s the news that caught my attention this week:

More Acquisitions & Investments in Transportation and Logistics

Truckload and Less-than-Truckload both use trucks. That’s about the most these operations have in common. Yet, just like their counterparts in the software and technology realm, transportation companies are looking to expand their footprint and find new growth opportunities.

For Knight-Swift Transportation, getting into the LTL business by acquiring AAA Cooper provides the company with a “growth platform.” Here’s what Knight-Swift CEO, Dave Jackson, says in the press release:

“We have long had interest in the LTL space and admired the success of AAA Cooper. We feel honored to be stewards of the AAA Cooper brand and, similar to previous acquisitions, AAA Cooper will continue to operate independently, while benefiting from the many synergies we expect through Knight-Swift.
“In seeking our first LTL partner, we had three main requirements – the scale for entry with significant market share, the profitability and management depth to operate independently and provide a platform for compelling growth opportunities, and a world class culture. We were excited to have identified AAA Cooper as a partner that meets all three requirements, and I couldn’t be happier to finally find the right time for both of us to create a partnership. This transaction firmly positions us as a meaningful player in the LTL space, where we intend to grow both organically and through future acquisitions.”

Also this week, GEODIS announced that it has acquired “substantially all of the assets of Velocity Freight Transport, Inc., a leading freight brokerage company based in Plano, Texas, from McLane Company, Inc., a subsidiary of Berkshire Hathaway.” Here are some details from the press release:

The acquisition expands GEODIS’ Capacity Solutions offering in North America at a critical time as the industry continues to face ongoing driver and truck shortages. The acquisition of Velocity will help meet the increased customer demand for more transportation alternatives to ensure their supply chains remain agile and effective. Velocity provides freight brokerage services that include refrigerated and temperature-controlled freight, flatbed and less-than-load (LTL) trucking, intermodal, van, and specialty options. Velocity’s team will remain in Plano, expanding GEODIS’ operation in the Dallas-Fort Worth metro area where it currently employs up to 3,500 teammates.

Meanwhile, DHL Express announced that it is investing “more than $360 million USD between 2020 and 2022 to build new and expand existing facilities in key growth markets within the Americas region.” According to the press release:

The investments come on the heels of significant B2C and B2B e-commerce shipment growth, where the Americas countries experienced, on average, 33% more shipments per day in Q1 2021 as compared to the previous year. The Americas region countries include the United States, Canada, Mexico, South and Central America and the Caribbean. For the U.S., shipment volumes were up 41% in Q1 2021 vs. Q1 2020.
“Globalization has continued to show its resilience, fueled by digitalization and the power of global trade,” said Mike Parra, CEO, DHL Express Americas. “With an ever increasing number of consumers shifting their shopping activities online, and the sharp rise in businesses selling their goods in the global marketplace, we need to continue the critical investments in our network infrastructure to meet the growth demands in international e-commerce and global trade.”

Finally, in the technology realm, Descartes Systems Group (a Talking Logistics sponsor) announced that it has acquired GreenMile, “a leading provider of cloud-based mobile route execution solutions for food, beverage, and broader distribution verticals,” for $30 million plus potential performance-based consideration. Here’s more info from the press release:

“GreenMile has built a great business by focusing on the unique challenges faced by retail food and beverage distribution companies,” said Andrew Roszko, EVP Commercial Operations at Descartes. “Their mobile applications are used by drivers around the world to improve their productivity and provide real-time delivery visibility to enhance customer service. The platform is complemented with advanced analytics and delivery performance management tools to provide managers in the field and corporate leadership with a comprehensive view of field operations. When combined with Descartes’ advanced route optimization tools, we believe it presents a compelling proposition to help distributors improve their final-mile delivery operations.”

What to make of all this news? The transportation and logistics landscape continues to evolve in response to market changes, driven most aggressively by e-commerce. As I wrote back in June 2018 in “Supply Chain Transformation: Not Just Digital, But Physical Too”:

There are two sides to the supply chain transformation coin: the digital and the physical. While digital transformation has been getting the lion’s share of attention from analysts and technology companies, you cannot overlook the importance of physical transformation — that is, the importance of recognizing that your supply chain and distribution networks, which were originally designed to flow truckloads of products from large distribution centers to stores, are becoming outdated in this new market where speed of delivery and inventory reduction are paramount.

The physical transformation of supply chains continues.

And with that, have a happy weekend!

Song of the Week: “Drive” by The Cars