Analysis: All eyes on 2024 but already DHL smells (a lot) of break-up value
…the parts have seldom been more compelling
Kerry Logistics has beefed up its European operation with the acquisition of Italian forwarder Tuvia – and is eyeing another acquisition, likely in France, this year.
“There is a constant pipeline of companies we are looking at, and we’ll complete at least one more deal this year,” Thomas Blank, managing director Europe, told The Loadstar.
Milan-based Tuvia manages some 25,000sq metres of logistics facilities throughout Italy and the acquisition of a majority share gives Kerry’s European expansion plans a boost.
“France will be next, it’s a natural link for us,” said Mr Blank. “Then Germany, we are far too small in Germany for my liking.”
Kerry Logistics is looking for more critical mass in air and ocean, but competition in the German market will make it hard to find the right acquisition target, he added.
“Germany is saturated, so it makes it difficult. But we could tweak [an acquired company] and get some synergies. We look for potential.”
Kerry also plans to grow organically, he added, pointing out that it has invested in sales. “We need both – you can’t just wait for M&As.” Finding Tuvia took “a number of years”, he said.
Kerry Europe is just a decade old on the continent, and to compete with the large European logistics companies takes a different mindset.
“We are far behind our competitors, so we have to work in a different way,” said Mr Blank. “We have to compete on innovation; we want to be the Google of freight forwarding.
“We have to convince our customers – not on price or the maturity of the product – but by being different. And our acquisition targets need to mirror that. We have to change every day. We have to be trendsetters, not followers.”
Kerry’s strategy for Europe is to focus on air and ocean, with a small amount of contract logistics. It won’t try to replicate its Asian business, where it has trucking networks.
Responding to the recent accusation by shipping lines that customers were not paying enough for their services, Mr Blank said the whole industry was at fault.
“The shipping lines have been unable to maintain prices because they didn’t ask for more. They would put out a GRI and then, 24 hours later, one of them would back out.
“The forwarders have played the same game – we want to capture as much revenue as we can. And the shippers need to understand the cost of the lines’ assets. Ships can’t sail free of charge. And with labour accounting for 70% of our P&L, we can’t work for free either.”
Mr Blank was optimistic about the market for the year.
“It’s good. The economy is doing well. We may moan, but these are great times and countries are coming out of crisis mode. “