Eighty percent of respondents reported slight business expansion over the past two years with more than 75 percent expecting this growth to continue in 2013, according to the independent survey of 484 international businesses, developed to examine the lasting impact the global economic downturn has had on logistics service providers, and the role of IT in ensuring their survival.
Growth has been well spread geographically across firms of differing sizes, although logistics service providers in Europe demonstrated lower growth rates in comparison to their counterparts in North Africa, Middle East and Africa. Logistics companies in North America and Latin America, particularly freight forwarders and 4PLs, experienced the highest level of growth. This highlights the impact that the ongoing Euro crisis has had on European logistics service providers.
Few respondents intend to pursue growth through acquisitions alone and most respondents intend to pursue growth organically, although there are still some organisations seeking expansion through a mix of both. The majority of logistics service providers will seek to generate their future expansion through organic growth, typically those with hefty loans and few tangible assets to invest in acquisitions. However, over 30 percent of forwarders and 3PLs envisage growth by merger or acquisition in 2013, reflecting their sector's stronger cash positions.
Joel Ray, head of consultancy at Transport Intelligence, said, "With over two thirds of companies surveyed expecting growth in the next 12 months and the majority of smaller firms feeling more optimistic, including 90 percent of 4PLs and over 80 percent of freight forwarders and 3PLs, the outlook for the logistics and transport industry is looking up."
Gerry Daalhuisen, solution manager for global trade and logistics at Kewill, said, "What the logistics industry must take into consideration, in particular the mid-sized organisations with 251 to 500 employees that are most likely to have grown in the past two years and are most likely to grow in the coming year, is that the companies who re-invested in their business and focused on expansion were the ones who reaped the rewards. Investing in technology is no longer an option; it is imperative in doing business efficiently and thriving in today's tough market place."
Source: Transport Intelligence
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