Technology

Transportation & Logistics Technology Consolidation, and What You Need to Know

Nov. 25, 2014

It’s been a busy couple of years in our industry. By now at least one of your technology providers have been bought by a competitor or investment institution. Some of these transactions brought benefit, but many bring risk to your original investments in your partners. The fact is we are just scratching the surface of uncomfortable mergers and acquisitions. So far we've seen a lot of consolidation based on grabbing market share; we have not seen a lot of disruptive acquisitions like we have in other markets. This will be the next trend.

Be prepared to have your technology providers snatched up by someone you don't know... or have never even heard of. For example, with the increased interest in regulatory management like EOBRS/ELDs it won’t be long for the companies managing regulatory components in other industries like healthcare or banking to start making investments in our industry. Nothing is more attractive to investors than mandates, or government-heavy industries. It’s just like utilities.

So let’s talk about what it means to you. Just to touch on the impacts, you need to think about the easy to identify stuff like roadmaps, commitments in pricing, or even you favorite account manager getting his walking papers. However, the most dangerous items are the ones that are hard to see. For example, if one of your major suppliers for ELDs is bought by a competitor, and that competitor owns a competing routing company to what you are using, will your existing routing partner be willing to share confidential information required to build an interface between the products? So many variables that impact your business, all out of your control.

At CLS we spend a lot of time building these mergers and analyzing what the outcome will be, both good and bad. I will tell you that even with the best of intensions on behalf of the acquirer, things will certainly get complicated when you factor in "coopetition.”

Make sure you know the lifecycle of your suppliers, who their investors are and how long they want to be in the business. Change hurts no matter what. Change you didn't plan for hurts a whole lot more!

So keep your ears and eyes open and make sure that your providers are not in the business of getting out of business.

About the Author

Christian Schenk 1 | President

Christian Schenk is president of CLS LLC, the premier technology consulting group for the transportation industry. With more than a decade of experience in telematics and fleet management, Schenk founded CLS LLC in 2013 to help transportation companies transition into the mobile era.

As an active member of many associations both in the wireless and transportation verticals, he has the benefit of interacting with some of the world’s most influential executives from worldwide technology leaders such as Google, Yahoo, Samsung, Motorola, LinkedIn, Verizon, AT&T and Sprint.

Prior to launching CLS LLC, Christian spent several years working for transportation technology leader, XRS Corporation. Through a variety of positions with XRS, Christian managed product marketing, marketing, business development and business strategy teams, and also drove the design and launch of the innovative XRS mobile optimization platform for the company.

Schenk is known in the industry for his extensive knowledge and in-depth, hands-on experience in process management, business development and transportation logistics. He is an active member and advisor for Samsung Telecommunications, Motorola Solutions and CTIA—The Wireless Association. He is also a member of many trucking-related associations, including the American Trucking Association, the National Private Truck Council and the International Foodservice Distributors Association.