Trimble Insight 2024: Navigating M&A Challenges and Opportunities with Cambridge Capital CEO Ben Gordon

In the ever-evolving world of supply chain management, mergers and acquisitions (M&A) have become a crucial element for growth and adaptation. Ben Gordon, CEO of Cambridge Capital and an expert with 25+ years of experience in logistics, shared his insights into current trends and what the future may hold during a recent session at Trimble’s Insight Tech Conference.

Tackling the Great Freight Recession

In recent years, the trucking industry has experienced significant disruption, with rates dropping nearly 50% and a wave of bankruptcies hitting trucking companies and brokers alike. Gordon referred to this downturn as the "great freight recession,” and predicted that it may come to an end soon, though no one knows the exact timeline.

The decline in freight rates and the exit of many key players from the market has created both challenges and opportunities. With fewer trucking companies in operation, there has been a slight reduction and availability in market capacity, especially in niche areas like Less-than-Truckload (LTL) freight, which has performed well despite the broader downturn.

Gordon noted that the logistics and trucking sectors are cyclical. Historically, periods of deflation in freight rates are followed by recoveries. He pointed to long-term data that show a four-year inflation/deflation cycle in trucking, suggesting that the current downturn may soon stabilize, offering companies the chance to recalibrate and prepare for growth.

Global Trade and the Shift Toward Nearshoring

Global trade has faced its own set of disruptions, starting with the United States decoupling from China. This shift began during the Trump administration, but has continued under President Biden, with both administrations recognizing the strategic importance of reducing dependence on Chinese imports.

As a result, trade between the US and Mexico has grown, making Mexico the largest trading partner for the US. This trend is expected to continue as more companies look at nearshoring to mitigate supply chain risks.

Nearshoring is a significant opportunity for companies looking to streamline their logistics operations. With supply chains growing more complex and global risks expanding, cross-border trade with Mexico is seen as a safer and more reliable alternative. As the world continues to grapple with geopolitical tensions and climate disasters, having supply chain partners closer to home is becoming increasingly attractive.

Technology and the Digital Transformation in Supply Chains

The role of technology in supply chains cannot be overstated. Gordon highlighted how supply chain technology investments have seen a significant shift. While overall investment has decreased compared to the massive influx seen during the “boom years” of 2017–2021, current levels of investment are still higher than historical averages. This indicates that the technology landscape remains a vibrant and essential one for companies looking to progress.

One key area of investment is predictive analytics. With AI becoming more mainstream, companies are leveraging predictive tools to better anticipate pricing changes, optimize routes and reduce inefficiencies. For example, one of the companies Cambridge Capital has invested in, Greenscreens.ai, has built a platform that provides predictive pricing models for trucking, helping companies stay ahead of market fluctuations.

Gordon also touched on the growing interest of Fortune 500 technology executives in increasing their budgets. Despite recent tech industry setbacks, large companies are spending more on supply chain technology, including warehouse automation, reverse logistics and delivery management systems. This investment reflects a broader recognition that technology is the key to industry resilience and efficiency.

Capital Markets and M&A: A Time for Strategic Growth

The M&A landscape in the supply chain industry is bustling with activity. Despite economic challenges, Gordon believes now is an excellent time for companies to be aggressive in the M&A space. Disruptions in the market often lead to the best opportunities for growth, and companies that invest strategically during downturns can position themselves for future success.

A couple of notable deals have taken place recently, with large companies acquiring niche players or divesting from “non-core assets.” For example, the divestiture by Flexport of its e-commerce fulfillment business to Shopify spotlights the trend of focusing on core strengths. Meanwhile, traditional logistics companies are expanding their portfolios by acquiring more tech-enabled services.

Deals like this highlight the consolidation trend, where larger players absorb smaller and more specialized companies to expand their capabilities. This activity is expected to continue as more leaders in the logistics sector consider M&A as a reasonable strategy. In fact, a recent survey presented by Gordon found that over 70% of supply chain executives were considering M&A or investment transactions this year.

Looking Ahead: Opportunities in E-commerce and Automation

As we move forward, several themes are likely to shape the supply chain industry. E-commerce fulfillment, particularly last-mile delivery and cross-border trade with Mexico, will continue to be major areas of focus. Additionally, automation and AI will play a more significant role in helping companies optimize operations, reduce costs and improve all-around service levels.

Gordon emphasized that companies in the supply chain space should look to invest in niches where technology can drive efficiency, such as AI-powered predictive tools, automated warehouse solutions and tech-enabled logistics platforms. These areas will be critical in the next wave of supply chain innovation, providing opportunities for companies to adapt quicker and invest more strategically.

Navigating the Future of Supply Chains

The supply chain industry is at a pivotal moment. While challenges such as the freight recession and global trade disruptions persist, the opportunities for growth and innovation are significant. Companies that invest in technology, capitalize on nearshoring trends and pursue strategic M&A will be well positioned to thrive in the coming years.

With the right strategies, businesses can navigate this turbulent period and emerge stronger, more resilient and better equipped to handle the complexities of modern supply chains.

Visit the Trimble Insight 2024 event hub to read more. Or, contact our team to learn how Trimble can help your organization be as prepared as possible for any transportation industry challenges.