It's sometimes difficult to separate which corporate and industry moves are driven by the times and which are the drivers.
Arguably, DHL was driven to an alliance with UPS to mitigate massive US losses. Close on the heels of that announcement came the rumor that FedEx was pursuing TNT. Ceva, which had acquired Eagle Global Logistics (EGL) in 2007, announced a management restructuring. Crane Worldwide, led by the former CEO and founder of EGL, announced it would launch as “an international company with a North American headquarters.”
The list goes on, but is there a trend emerging?
DHL could have exited the US domestic market and become more like TNT with its arm's length approach to connect North American shippers and consignees to its international network. It chose to stay rooted in a market it says is important to its global network but which has been financially painful. That keeps alive a third choice in domestic express services. It also shows that even the most virulent competitors can find reason to cooperate.
Could FedEx be looking at its own network needs and reaching the conclusion that it doesn't have to own everything to succeed? An alliance with TNT could strengthen FedEx's global position without a massive outlay of cash at a time when its core domestic market is suffering and the US dollar makes any overseas acquisition much more expensive. For TNT, it could provide greater density on its network and help balance some of its own market fluctuations And, of course, it could be the engagement before a wedding.
Ceva, which was feeling the gap in its service portfolio where Wilson had been when it was part of TNT rescued EGL from a takeover attempt by former CEO Jim Crane. Its new management structure may have taken a page from its strategic plan from TNT days. It has now integrated its contract logistics and freight management services under region managers rather than separate functional units. This allows local market forces to play freely, driving those services region by region.
Crane Worldwide is launching as a pure-play freight forwarder. It doesn't want to be drawn into too many non-core areas and take on unfamiliar functions or incompatible IT platforms. It may be a slight over-reaction to the recent history of its senior executives, but the message is clear: focus on the core. That will certainly be necessary for survival as a start up in a difficult market.
In the US motor carrier market, YRC Worldwide may be forced to take a step many expected when it first acquired Roadway Express and combine the operations of Yellow Freight and Roadway. The rationale for two national LTL networks appears to have expired. As it builds out its capabilities in regional LTL, it is facing some established and some newly expanding competition.
Underlying so many of these moves is a focus on “core.” What makes up that definition will vary with the culture of each company. It seems the companies most likely to succeed in this evolving logistics market aren't allowing themselves to be distracted from what made them a player in the first place. This could help avoid some catastrophic contraction in the industry, a prospect that would be very disruptive for everyone.