Logistics Mega Mergers Are Not Delivering Expected Benefits to Customers

A recent study by SCALA, a supply-chain consulting firm based in the U.K., highlights some differences in perspective between logistics companies and their customers.

“Logistics companies see benefits in growth through being able to provide a wider range of services; a more integrated service with further benefits from increased synergy; and operational cost benefits. Unfortunately a large proportion of their customers do not see it that way,” said John Perry Managing Director of SCALA.

Just over two thirds of all companies surveyed had direct experience of the impact of the consolidation taking place in the marketplace. Of the logistics companies, 97% said there had been client synergy benefits and 83% said this had resulted in operational cost reductions. From the customers perspective however, just 24% said they had seen synergy benefits and 28% had seen cost benefits.

“One of the main arguments for these mergers has been to bring about significant cost and service benefits for customers. Why have they not materialized?” Asked Perry.

In addition 95% of logistics companies said that the range of services offered had been extended--but only 25% of customers agreed, with the rest saying this was not the case or was irrelevant. And while 94% of all logistics contractors claimed to offer a fully integrated supply chain service, just 7% of all customers said their contractors could provide such service.

“There seems to be a serious mismatch between the expectations and experience of service providers and users,” Perry concluded.

Source: SCALA Supply Chain and Logistics Consulting

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