The freight and logistics world has experienced some major ups and downs in the past few years. First, a freight recession led to a slowdown in the shipping and transportation industry—lasting about two years after COVID. On top of that, private equity and venture capital firms pulled back on funding supply chain technology. They were cautious because the market wasn’t looking great.
But according to Benjamin Gordon, founder and managing partner of Cambridge Capital, things are changing now. There’s been a wave of companies buying and merging with others to stay ahead. He talked about this in the Future of Freight Festival (F3) hosted by FreightWaves, where he and Craig Fuller, FreightWaves’ CEO, shared their thoughts about what’s going on in the industry.
One example Gordon mentioned was the recent purchase of IMC Logistics, a U.S.-based drayage company, by Kuehne+Nagel, a global freight company. Even though Kuehne+Nagel didn’t need to buy IMC, they went for it because big public companies like theirs are under pressure to keep growing. Gordon explained how companies that thrived during COVID, when shipping was booming, are now struggling to meet shareholder expectations.
Private equity-backed companies are also starting to look at buying businesses again. Gordon thinks this will pick up next year, but there’s a catch. The companies they want to buy aren’t worth as much anymore, so the deals are trickier. On top of that, these buyers can’t rely on borrowing money like they used to. They’ll need to use more cash upfront, which has been holding them back.
Gordon gave an example to make it clear: If a company bought something in 2021 or 2022, when the market was booming, it might now have lower earnings (EBITDA) and higher debt. That makes it harder for them to use loans for new purchases, so fresh money from investors is essential.
Looking ahead to 2025, Gordon predicts that big corporations will start selling off parts of their businesses that no longer align with their goals. This can be a smart move when companies want to focus on what they do best and let go of the rest.
Craig Fuller added to the conversation by pointing out how ocean shipping companies made record profits during COVID. These companies, like Maersk, are now expanding into the U.S. domestic market. For example, Maersk wants most of its profits to come from non-shipping activities, so it’s using the extra cash it earned during COVID to invest in new areas.
When it comes to venture capital (VC), Gordon sees a lot of excitement around artificial intelligence (AI). He compared today’s AI boom to how people felt about the internet back in 1999.
Gordon believes AI can make life easier in logistics, like using voice recognition to help truck drivers manage their work more efficiently. But he also warned against just following trends. He said it’s better to look for real problems that need solving, instead of chasing whatever is popular at the moment. That’s where the most valuable innovations often come from.
By leveraging their expertise and resources, Lading Logistics aims to provide efficient and reliable international shipping and logistics solutions for their clients.
