📊 Cambodia's $50B logistics master plan debuted at China-Cambodia forum

Irbis Index September 2023

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News

Decline in funding for supply chain management startups in 2023 According to Crunchbase data, investors have shown declining interest in supply chain startups, with U.S. funding barely surpassing $1B in the first quarter of 2023. This is less than one-fifth of the total raised in the same period last year. The global freight industry is experiencing pricing declines, leading to a challenging environment for supply chain startups. Prominent startups such as Convoy underwent an abrupt closure, while Flexport has dismissed 30% of its workforce. Despite the funding downturn, some supply chain related deals, albeit smaller in size, are still being closed in 2023. (link)

DSV and Saudi Arabia’s NEOM establish $10B logistics joint venture DSV, a Danish transportation and logistics company, and Saudi Arabia's NEOM special economic zone have formed a $10B joint venture (JV) focused on supporting the development of NEOM projects. The JV aims to provide end-to-end supply chain management, investment in transport and logistics assets, and transportation services in NEOM. NEOM will hold a 51% stake in the JV, while DSV will hold the remaining 49%. The partnership is expected to boost the Saudi economy and create over 20,000 job opportunities. The completion of the JV is subject to regulatory approvals, which are expected to be obtained in the second quarter of 2024. (link)

Cambodia unveils $50B master plan for transportation and logistics at China-Cambodia cooperation forum The Cambodian Deputy Prime Minister, Sun Chanthol, unveiled an ambitious master plan for the country's transport and logistics sectors during the China-Cambodia Cooperation Forum. The plan consists of 174 projects valued at $50B, aiming to boost economic growth through infrastructure development. Foreign capital plays a crucial role in this plan, with the intention of attracting advanced technology and infrastructure investments. The establishment of a Special Economic Zone in Preah Sihanouk province is a key initiative within the plan, aiming to make it a model multi-purpose SEZ hub. The master plan aligns with Cambodia's effort to strengthen ties with China's Belt and Road Initiative. (link)

€1B cash injection to boost Czech rail network and promote modal shift The European Investment Bank (EIB) has agreed to provide a loan of close to €1B to upgrade the rail network in the Czech Republic. The loan, which is the largest ever given by the EIB to the country, will be managed by Správa železnic, the national railway infrastructure administrator. The project aims to retrofit the trans-European networks (TEN-T) railway lines, with a focus on promoting sustainable transport and reducing emissions. The funding comes as part of a broader initiative to invest in rail and road infrastructure projects across the European Union, totaling €7 billion. (link)

UPS to acquire Happy Returns from PayPal UPS announced its plans to acquire Happy Returns from PayPal, a move aimed at enhancing its label-free returns and offering customers a seamless returns experience. The acquisition of Happy Returns, a US-based tech firm, will enable UPS to expand its solutions for frictionless returns, with expectations of making the service available at over 12,000 locations across the US. Happy Returns CEO David Sobie is expected to continue leading the business for UPS pending regulatory approval, with the deal anticipated to close in Q4 of this year. This move further strengthens UPS's logistics-as-a-service offering and supports its goal of building a robust reverse logistics business. (link)

Ryder to acquire Impact Fulfillment Services Transportation and supply chain company Ryder System, Inc. has announced its acquisition of IFS Holdings, LLC (IFS). IFS specializes in contract packaging, contract manufacturing, and warehousing for major consumer brands in the US, primarily in the consumer packaged goods, retail, and healthcare industries. Ryder will acquire 15 operations across multiple states, adding around $250 million in annual revenue to its supply chain solutions business segment. The acquisition aligns with Ryder's strategy to accelerate growth in its supply chain business and expand its service offerings. The deal is expected to close next month, with IFS' President, Rob LeBaron, joining Ryder as the Vice President of contract manufacturing and packaging. (link)

Forward Air has second thoughts about $150M Omni Logistics acquisition Freight and logistics company Forward Air Corp. is reconsidering its $150M acquisition offer for Omni Logistics. Originally viewed as a strategy to bolster their position in the expedited less-than-truckload (LTL) freight sector, Forward Air now has concerns about Omni's compliance with the merger agreement. Activist investors had previously obtained a restraining order against the deal, but it has since been dissolved. Despite Forward Air's doubts, Omni asserts that it has met all requirements and intends to proceed with the merger. Both companies present conflicting positions on the matter, with Forward Air considering termination while Omni insists the agreement is legally binding. (link)

Quarterly Results

The Q3 2023 results for logistics and supply chain companies showcased mixed performances across the sector.

Kuehne+Nagel saw a strong performance in sea logistics but ongoing challenges in air logistics. It reported a 52% drop in EBIT and a 46% decrease in turnover in Q3. However, CEO Stefan Paul highlighted the company's market share gains and successful implementation of their strategic roadmap.

Ryder experienced a revenue decline of 3.7% to $2.92B from $3.04B, with net earnings of $161 million compared to $246 million in the previous year.

UPS Inc. announced lower earnings due to increased costs from a new union labor contract and weaker package demand, resulting in a cut to its annual profit target. Adjusted earnings per share decreased by 47% compared to the previous year, while sales dropped by approximately 13%.

Universal Logistics Holdings reported a decline in Q3 earnings due to challenges in the freight market. Despite a 17% year-over-year decrease in total revenue, the company beat Wall Street estimates by 1.3M.

The general outlook for 2023 in the logistics industry suggested lower volumes and lower prices, making it challenging for companies to match or exceed the 2022 results.

Tech

BMW starts testing eTrailer for logistics purposes - Electrive

Congestion Cost Trucking a Record $94.6B in 2021 - Transport Topics

Uber Eats moves towards its goal of being emission-free in London by 2030 with new partnership - Post and Parcel

Flexport eyes Convoy's tech – but not its liabilities, as more lawsuits are filed - The Loadstar

St. Lawrence Seaway Reaches Deal to End Shipping Strike - Transport topics