News / Acquisition 'the only option to grow' in today's lacklustre market

© Phongsaya Limpakhom |

The freight market may be quiet – but there is corporate activity afoot. In fact, M&A is the only real growth opportunity in the market right now.

Yesterday, Flexport announced it had sold the Convoy technology to DAT Freight & Analytics.

Readers will remember that this tech, and a handful of staff, was acquired by Flexport in a fire sale for pocket change in November 2023, after once-upon-a-time unicorn Convoy collapsed, citing “a massive freight recession and a contraction in the capital markets” and a “crushing” of its natural acquirer, apparently. 

However, co-founder Dan Lewis said at the time that Convoy’s tech had enabled “conditions for a truly scalable technology platform”. 

Now Flexport has ‘matured’ the tech and sold it on, “delivering a massive return on investment,” said CEO Ryan Petersen. 

He said it had been acquired in order to “preserve an important piece of logistics technology that was on the verge of disappearing, adding: “Over the past 18 months, we rebuilt and relaunched the platform as a neutral digital freight execution layer that serves brokers, carriers, and shippers across the market.

“We brought tens of thousands of high-quality carriers back onto the platform, reignited broker adoption, and proved that this technology has tremendous value and potential.” 

Now “far more valuable than when we acquired it”, it will boost DAT’s offering. 

“This is a win-win-win. And it’s exactly the kind of smart, strategic move we aim to make every time.” 

And with the freight market currently in a summer – or longer – lull, forwarders have few opportunities for growth. The Convoy sale is one good way to add to the Flexport coffers; but other forwarders are more likely to be eyeing acquisitions rather than sales. 

Yesterday, in fact, JAS announced it was in the process of acquiring the UK’s Pentagon Freight Services, a forwarder, project specialist and ship agency. 

“The Pentagon acquisition perfectly complements JAS’s strategic goals, significantly increasing our ability to offer highly specialised logistics solutions for the oil and gas, marine, construction, and energy industries,” said Marco Rebuffi, CEO of JAS. 

And then there is Yusen Logistics (Europe)’s acquisition of the healthcare logistics business of the Walden Group, which provides contract logistics, 4PL, first mile transportation and distribution services from 138 locations in 12 countries throughout Europe.

And last week Swissport, which averages one European acquisition a year, said it was buying London-based handler ASC. 

Swissport said: “This strategic acquisition sets Swissport up for continued growth in both ground and cargo handling at London’s hub airports. Specifically, the transaction provides additional capability to Swissport’s ground handling operations … and gives it access to additional cargo capacity at two warehouses at London Heathrow.” 

Growth. That’s the name of the game. And organic growth is tough in current market conditions. 

“Acquisition is the only option to grow,” said a senior forwarder from an acquisitive company, “because the market is flat and stable, and a little bit in limbo.  

“We had the front-loading, and still the market didn’t completely boom. So where should companies get their growth from, get their fantasy from, besides taking business from others? Obviously the big ones try to do that, and try to take the big volumes from the BMWs, the Apples, and so on. 

“So there’s people fighting hard to grow – but it’s shifting volumes. It’s not new volumes. 

“The market isn’t growing, it’s saturated maybe. So if you want to grow, then acquisitions is what’s left as a way to increase your numbers.”