Transportation & Warehousing Industry

Q3 2022: Mergers and Acquisitions Trend Report

Industry Overview

• The industry includes players engaged in the transportation and support operations of passengers and cargo by air, water, water, pipeline, and road.
• The industry contributes a little over 5% to the U.S. GDP and employs more than 6.5 million people. Major drivers in the industry include consumer spending, total trade value, energy prices, industrial production, and corporate earnings.
• Despite the global geopolitical and economic uncertainty, the industry has experienced increased M&A activities reaching more than $246 billion mid-May despite deal volume decline by 7% compared to FY 2021.
• The Industry saw record deals by financial and strategic buyers, where financial buyers made up over 85% of the deal value at the end of Q2 2022.

Key Industry Trends

• Industry profits are expected to be lower as energy prices increased significantly. Energy price volatility will continue to pose major uncertainty for investors.
• The increased likelihood of economic activity slowdown may push the industry to a subpar performance level.
• Particularly, the air transportation sub-sector will continue to subject to significant macro and geopolitical vulnerabilities as it has yet to recover to its pre-pandemic levels and the recent Russia-Ukraine war

Recent M&A Transactions

Historical Performance

• Sector revenue growth between 2017 and 2022 remained around 2.3%, while overall industry profit in the same period was 6.7%.
• As the industry resurfaces from the world’s recent lockdowns, it is expected to see increased activity.

Future Industry Growth

• The Transportation and warehousing Industry is benefiting from technological innovations, whether it is artificial intelligence, transportation management system, or realtime visibility solutions. The industry continues to invest in autonomous and electric trucks and potential autonomous last-mile delivery systems.
• These innovations have the potential to improve the industry’s margins, create new jobs, and reduce the industry’s reliance on fossil fuels.