The Supply Chain Matters blog features our second in the year 2021 editions of our news capsule feature: This Week in Supply Chain Management Tech.
This series presents a brief synopsis of noteworthy supply chain management technology as well as business investment news which we believe would be of specific interest to our global-based blog readership.
Perhaps headlining this edition was last week’s breaking tech related news that supply chain planning applications provider Blue Yonder will be acquired by Panasonic for a reported $7.1 billion. We elected to highlight the implications of this announcement in a dedicated This Week in Supply Chain Tech blog commentary.
Included in this capsule edition are highlights of noteworthy announcements and/or developments from:
DSV Panalpina and Agility Logistics
Kuehne+Nagel and Apex Logistics
DSV Panalpina to Acquire Agility Logistics
Danish based and global focused transport and logistics services company DSV Panalpina announced plans to acquire the logistics division of Agility Public Warehousing in an all-equity deal estimated to upwards of $4.2 billion. The Kuwait based Agility Global Integrated Logistics business unit has a services focus concentrated in Asia-Pacific and Middle East regions. According to reporting from The Wall street journal, the Agility logistics unit operates in more than 100 countries, has upwards of 17,000 employees and generated $4 billion in revenues in 2020. Reportedly, Agility was seeking a buyer or merger partner in order to increase scale.
As a result of this deal, Agility would garner a reported 8 percent equity stake in DSV.
This deal represents the third major acquisition by DSV of a major rival over the past five years. In April of 2019, Supply Chain Matters highlighted DSV’s merger agreement to Swiss based Panalpina Welttransport Holding in an all-stock deal valued at $5.9 billion when the deal closed. With this latest acquisition DSV’s aim is to be able to be recognized as one of the top three global freight forwarding companies. This provider is currently ranked fourth.
The deal is expected to close in the third quarter of 2021. DSV expects the Agility unit to be fully integrated in about a year after the transaction closes.
Lineage Logistics Raises $1.9 Billion to Expand Cold-Storage Facilities
Michigan based Lineage Logistics LLC, noted as the largest refrigerated cold-storage company globally, raised $1.9 billion in a recent funding round that will help to construct new facilities, fuel additional acquisitions, as well as develop warehouse automation technology.
The company completed 38 acquisitions in 2020, adding temperature-controlled capabilities among 11 countries. Acquisitions included refrigerated railcar operator Croyo-Trans.
According to business media reporting, this round brings the valuation of the services provider to around $18 billion. Lineage has raised upwards of $4.3 billion in equity since the begging of last year. The COVID-19 pandemic and the accelerated adoption of online grocery shopping has resulted in greater demand for temperature-controlled facilities.
Kuehne+Nagel Acquires Apex Logistics
Swiss based Kuehne+Nagel International agreed to acquire freight forwarder Apex International Corp. from Asia based private equity firm MBK Partners in a deal that values the firm at about $1.5 billion according to Bloomberg reporting. No financial terms were disclosed in the announcement. The takeover deal is subject to conditions including merger clearance by regulators.
Reportedly Apex International generates revenues in excess of $2.3 billion and employs upwards of 1600 people.
Kuehne+Nagel is ranked among the top three largest freight forwarders globally. Reportedly the Apex acquisition will increase Asian services exposure to 18 percent from a current level of 10 percent. The deal represents another example of bigger players increasing their scope of services to support the ongoing boom in online commerce logistics and transportation service needs.
PlusAI Taps Chinese Investors
Self-driving truck start-up PlusAI raised a reported $200 million in new capital from new investors including a Chinese investment firm and Silicon Valley venture-capital.
The Series B financing round was led by Hong Kong based Guotai Junan International Holdings Ltd, London based Hedosophia, and China based Wanxiang Group. Further participants included Chinese sate-owned auto maker SAIC Motor Corp., Lightspeed Venture Partners and Sequoia Capital.
The company’s technology is aimed at the ability to retrofit existing Class 8 semi-trucks with autonomous driving capabilities in the U.S., while integrating its technology onto new trucks produced in China. With this latest funding round, the technology provider will be able to move ahead this year with volume production of its self-driving systems. The company reportedly has thousands of pre-orders from Chinese based fleets in a joint partnership with FAW Jiefang, with plans to also begin shipments for European and U.S. customers.
Arrive Logistics Garners $300 Million Investment
Austin Texas based electronic freight brokerage provider Arrive Logistics has received a $300 million investment from an ATL Partners led group that included Baupost Group, British Columbia Investment Management Corp. and Singapore sovereign wealth investor Temasek Holdings.
The electronic freight broker had previously raised $50 million in funding and according to reporting from The Wall Street Journal is expecting to generate more than $1.2 billion this year, a 48 percent increase from last year. The services provider generated $530 million in revues during 2019. Company executives indicate that Arrive intermediates upwards of 3,000 freight loads per day.
With this latest infusion there are reportedly plans to undertake $20 million on additional technology improvements in an effort to increase the company’s electronic brokerage services in the busiest shipping routes.
Walmart to Again Abandon More Store Automation
In a somewhat reverse notion of this column, we wanted to call reader attention to another announcement from global retailer Walmart relative to in-store automation initiatives.
Last week, The Wall Street Journal reported that the global retailer is phasing out its vending machine like automated robotic pickup towers deployed in over 1500 stores that allowed online customers to pickup their orders without assistance. Reportedly the decision reflected a growing focus on store associate-assisted curbside pickup that have become more popular during the pandemic. Upwards of 300 of these robotic machines are going to be removed from stores and around 1300 “hibernated” units will remain idle.
The development comes after last year’s decision to remove its usage of robots within over 500 physical stores to scan store shelves for inventory management and needed restocking. These robots involved a supply agreement with Bossa Nova Robotics that began in 2017. With exploding online orders, the retailer found it had more associates walking store aisles to pick orders, and these workers could perform the same inventory checks.
A similar theme to both developments is that retailer’s senior U.S. executive John Furner had concerns about customer perceptions in observing such robots in the company’s physical stores. The store automation strategy was originally initiated by the retailer’s former head of U.S. stores.
As with all decisions related to Walmart, there is likely more than appears at the surface. The retailer has recently boosted wages for in-store associates which is tied to different job roles and responsibilities. As notions of new processes often occur, assessing benefits is a constant need, and when real benefits are not meaningful, learn and move on.
This concludes our latest edition of Supply Chain Matters This Week in Supply Chain Management Tech.
A note to readers: Supply Chain Matters will feature this column periodically as announcements warrant.
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