As we approach the two year anniversary since Covid-19 disrupted the global economy, health system, and general way of life, we felt it was appropriate to highlight a few major changes to the professional landscape that followed as a result of the global pandemic: remote working, employee engagement, and corporate strategy.
Working remotely - although technologically feasible in previous years - was never truly seen as a viable option unless absolutely necessary. However, given the March 2020 economic shutdown and mandated quarantine period, companies were forced to operate and weather the economic turmoil from a distance. The idea of working remotely was initially a temporary solution to a much bigger problem, but as weeks turned into months, and now years, it has become the norm and preferred way of working. As many of you know, Metafora (formerly CarrierDirect) formally converted the company operating model to fully remote. This is just one example of how companies have adapted to the Post-Covid way of working.
Secondly, employee engagement / satisfaction became a major talking point and point of emphasis for employers. Covid-19 provided employees an opportunity to reflect on their experience, overall happiness, and general outlook towards the company or industry they worked for. This reflection period ultimately ignited what is now referred to as the “Great Resignation” - signifying the nation’s highest quit rate in the last two decades. Coupling this movement with increased wage expectations, and favorable work life balance conditions, companies had no choice but to reconsider their Pre-Covid approach to engaging their workforce and investing in their most precious asset - intellectual property.
Lastly, Covid-19 prompted businesses to address their operating model, corporate strategy, and future state vision. This internal review was particularly necessary in the transportation and logistics industry given the industry’s outdated infrastructure and society’s overwhelming spike in e-commerce behavior. Given the speed in which industry dynamics changed, transportation providers and other supply chain players saw inorganic growth initiatives (i.e M&A transitions) as a practical solution to keeping pace with industry standards.
2021 M&A Activity Drivers
Record Earnings in Transportation & Logistics
- Transportation providers experiencing record highs for both margin and earning
- Readily available cash flow resulting from favorable top line performance
- Consumer spending acting as a primary catalyst for increased parcel shipment volume
- Government stimulus, increased wages, and quarantine purchases continue to drive positive consumer sentiment
Supply Chain Concerns
- Shippers and Transportation providers alike seeking greater supply chain visibility
- Businesses looking to reduce uncertainty stemming from Covid related delays / disruptions
- Need to strategically position business to become industry leader in supply chain optimization
- Increased desire for vertical integration and reduction in outsourced capabilities / service offerings
- Broader industry looking to evolve and move away from traditional ways of doing business (i.e. manual labor, hard copy reports)
- Increasing need to keep pace with advanced technology adoption and utilization
- Businesses looking to improve technology capabilities and data mining efforts
Favorable supply and demand dynamics
- Covid-19 causing disruption in global economy, creating a natural opportunity for buyers / sellers to open discussions
- Cheap financing as well as premium valuations attract potential acquirers
- Industry composed of companies “built to sell” or those run by owners prepared to exit
- Platform businesses driving mutually beneficial synergies
Metafora is dedicated to serving, growing, and disrupting the transportation & logistics space on behalf of operators, acquirers, sellers, and investors. Learn more here about how Metafora can help you get to the next level fast as you work through your M&A journey.