Logistics Mergers Dont Help Customers

These insights are the results of an industry-wide study by UK-based SCALA Supply Chain & Logistics Consulting that looked at the recent round of mergers and acquisitions by major logistics service providers.

John Perry, the consulting firm’s managing director explained that while the companies said they were benefiting from their ability to provide a wider range of service, to grow through internal synergies and to reduce their costs of doing business, their customers don’t see themselves as beneficiaries of the mergers.

In fact, according to the survey, while 97% of the merged provider companies claimed synergy benefits and 83% claim reduction in operational costs, just 24% of their customers say they see any benefits from the synergies and only 28% of customers have experienced cost benefits.

Taking a wider view of logistics services providers, some 91% of customers persist in using more than one company for their needs and 72% don’t feel it makes strategic sense to move to just one company for logistics service needs. Though 95% of merged logistics providers feel their range of services has been widened just 25% of their customers felt that was true. Most customers don’t feel that any one company can provide a full range of logistics services.

There are insights shared by both merged companies and their customers. Over 90% of both groups feel that future choices of providers will be reduced, with 80% of both feeling there will be increased cost pressure on smaller contractors. Just 10% of those surveyed feel that the mergers and acquisitions will mean improved management capability or increased levels of customer service.

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