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Outsourcing has proven to be a powerful tool in the area of transportation and logistics, but a wave of mergers and acquisitions might be shrinking the pool of providers. A new report by PricewaterhouseCoopers LLP uncovers a rapid rise in large deals in that sector, with a disclosed value of at least $1bn. The 11 large deals announced in the first half of 2008 put the year on pace to exceed both 2006 and 2007. The passenger ground category was responsible for 29 percent of deal value in the first half of this year, while interest in rail and logistics targets also saw increases over the prior two years, PwC says. Logistics companies accounted for 19 percent of total deal value, while rail took up 16 percent. About a third of deal volume during the first half involved financial investors that favored shipping and logistics deals over other market segments, the report finds. The actual number of transportation and logistics deals was down in the first half of this year, due in part to high risk premiums and a drop in debt-market liquidity, according to PwC.
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