XPO opens three new service centres
PRESS RELEASE XPO Opens Three New Service Centers in Growing Freight Markets to Enhance Service for ...
I take my hat off to DSV’s management team.
Admittedly, their handling of the UTi Worldwide integration was too good for me to be able to match their projections, which I have always considered overly bullish – particularly in regard to the headcount figures that would emerge after the UTi purchase within a couple of years, and given the generous estimates for earnings growth and profitability targets for the combined DSV/UTi entity in late 2015.
So, I was clearly wrong predicting significantly ...
Comment on this article
Michael Pruden
August 30, 2017 at 7:16 pmHi Alessandro,
Good article. I don’t quite understand though why you think vertical integration makes more sense than horizontal integration, especially as DSV has overimpressed with their horizontal integration capabilities.
DSV-UTI integration was a merger of a European and an American forwarder. Wouldn’t the next logical step be a horizontal integration with a large Asian forwarder?
Michael
Ale Pasetti
August 31, 2017 at 9:10 amHi Michael,
Thanks much for your comment.
I have mixed feelings, a you can probably tell from my writing, and I do not necessarily think that vertical integration ought to be the preferred way forward. But it could make more sense than horizontal integration if it turns out that the traditional business model of FF is no longer sustainable. And there are signs already that all the main FF players are adapting but are also finding it very difficult to accept the behaviour and new budget requirements of the shippers , while relationships with the carriers both in air and ocean freight remain difficult to manage (consolidation in among container shipping companies is a risk that some FF execs are underestimating, IMO.) The middle man is squeezed. That said, the merger of a European company with an Asian forwarder could also make sense on the road to consolidation in the FF world — do you have a name in mind?
Best Regards,
Ale
Michael
August 31, 2017 at 2:08 pmI’m thinking a top25 forwarder with a strong presence in Asia that is currently not doing well. Maybe Yusen?
Ale Pasetti
August 31, 2017 at 9:48 pmInteresting name, Michael, and attractive geo mix with limited domestic exposure, which is a plus. A bit small maybe?
How about Agility (air/sea scale) and/or oft-rumoured Damco (ocean)?
Still, is that the way… forward?