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In the logistics industry, there is currently a race to consolidate and innovate. This is especially true for the ocean carrier market. Within the past two years, eight major ocean carriers were operating in just three alliances, meaning these carriers are responsible for the transportation of most containers.

Strong global demand has, of course, contributed to the rise of ocean shipping rates. However, consolidation is another factor that is affecting the rates. There are various reasons for mergers and acquisitions in the logistics industry, but there are always drawbacks that come along with the benefits. For example, buyers may pay too much for their targets in this current sphere, meaning they’re taking on more debt than they can handle. For successful integration, the deals must be efficient at every turn.

Here are three mergers that have received a decent amount of press recently. We have one huge merger between DSV and Panalpina, along with two shipping lines changing their strategy to do more the work that the forwarders are doing. This news will dramatically change the industry within the next few years.

DSV and Panalpina

Danish firm DSV finally reached a merger agreement with Panalpina after increasing its offer to $4.62 billion USD. DSV claims that this consolidation will increase its annual revenue by 50% and lead to operations in more than 90 countries. The deal is pending shareholder approval but is expected to officially close in the fourth quarter. Afterward, DSV is proposing that they change their name to DSV Panalpina AS.

This is the biggest merger since Exel and DHL, so there’s no doubt it will have a huge impact on the industry.

CMA CGM and Ceva Logistics

CMA CGM is not closer to a full takeover of Ceva Logistics. By folding Ceva into CMA CGM, they’re hoping to “accelerate [Ceva’s] required transformation and to make it a more profitable and efficient leader in logistics.” Last month, it was announced that Ceva’s board recommended remaining shareholders sell back their stake, marking the end of the company’s time as a public company. By the third quarter, CMA CGM can force a sale of remaining shares and delist Ceva from the Swiss stock exchange.

This strategy of adding trucking and warehouse experience to ocean shipping isn’t without risk. Every sector faces its own pressures. However, it’s a move that other ocean carriers are making, as well, moving away from a commodity transport service. The company leaders feel that consolidating would benefit from having an end-to-end logistics offering that covers land, air, and sea.

Maersk and Damco

It was long-speculated in 2018 that Maersk’s next step would be a merger with Damco in an effort to start the journey toward being a “global, integrated container transport and logistics company.” That merger took place early in 2019.

Now, Maersk added an online customs clearance as another step toward becoming a one-stop-shop for shippers while simultaneously positioning themselves as one of the digital leaders in the ocean freight industry.

Together with digitalization, this M&A trend will dramatically change the market as we know it in the next 3 to 5 years more than it has changed in the last 30 years.