3PL Sector Sees Some Consolidation

3PL Pixior aerial shot

An aerial shot of a Pixior 3PL facility (contributed photo)

If any sector was ever ripe for consolidation, it’s third-party logistics (3PL), with literally thousands of companies plying their trade, looking to help retail shippers outsource fulfillment, storage, shipping and other operational aspects. Well, 2022 got us at least part of the way there.

A key aspect of M&A in the 3PL space is large players acquiring smaller niche firms that bring not only physical capabilities and equipment but in-house talent that’s hard to find otherwise, said Brian Gibson, Executive Director of the Center for Supply Chain Innovation at Auburn University.

“If you want to start up a last-mile capability, and you look around and don’t have that skillset internally, it’s extraordinarily difficult to create that today by poaching from other companies,” Gibson said.

The year kicked off with Cart.com announcing its acquisition of FB Flurry, for an undisclosed sum; the deal actually closed in late December. Cart.com capped off its buying spree from 2021 by acquiring the Dallas-based startup, founded in 2018. Adding FB Flurry’s 1.6 million square feet of warehouse space in Dallas, Florence, NJ and Salt Lake City gave Cart.com over 2 million feet of space.

“Their OMS integrates out of the box with all major platforms like CommerceHub, Shopify and Amazon, enabling ship to and from store, direct to consumer and B2B, with multi-rate card (carrier) management,” said Frank Parker, who had just been named CFO of Cart.com, of FB Flurry. “It fills out the end-to-end merchant experience that’s key to our business model.”

In April, Weber Logistics acquired Pacific Coast Warehouse Company for an undisclosed sum, adding 600,000 square feet of space in Ontario, CA and Chino, CA, for a total of more than 4 million feet of space in California across 15 facilities.

“In the last two years, Weber has doubled its footprint as we seek to rapidly scale our omnichannel distribution network,” said Weber Logistics CEO Bob Lilja. “The acquisition of PCWC brings us strong talent and added infrastructure to continue on that path.”

During the prior 12 months, Weber had added two large Inland Empire DCs totaling 1.1 million square feet, as well as a high-capacity port terminal in Downey, CA, to handle drayage and fleet operations for all West Coast ports.

Then in August, Seko Logistics acquired Pixior LLC, a 3PL based in Commerce, CA, with seven locations along the West Coast and one in Connecticut, with a concentration in high-end fashion brand clients. The addition of Pixior for an undisclosed sum nearly doubled Seko’s fulfillment and warehouse space in the U.S., and tripled its West Coast capacity. It also added drayage services to increase the speed and efficiency of Seko’s port discharge services.

Later that month, Geodis announced it was acquiring Need It Now Delivers, adding last-mile delivery principally on the east coast, a capability that was lacking for the contract logistics, freight and fulfillment provider as it looks to ramp up its penetration into ecommerce and omnichannel companies.

Jeff McDermott, EVP of transportation for Geodis in Americas, said Need It Now’s strengths complement Geodis’ extensive assets in contract logistics and warehousing. He added Geodis had been using Need It Now as a delivery partner for several years and was satisfied with the results.

“We’re always look at additional acquisition opportunities to expand last-mile and distribution throughout the U.S.,” McDermott said. “They’ve been doing a good job of filling that east coast capacity for us.”

Finally in November, Ryder System Inc. acquired niche third-party logistics provider Dotcom Distribution, its second such deal this year, boosting its position in health and beauty, cosmetics and fashion and adding the bench strength of a CEO who has been around since the early days of ecommerce.

Ryder closed on its acquisition of Whiplash in January for $480 million, giving it 19 facilities totaling nearly 7 million square feet in key markets and ports including Long Beach, CA, Seattle/Tacoma, New York/New Jersey and Savannah, GA.

Dotcom, headed by founder and owner Maria Haggerty, operates a 400,000-square-foot fulfillment center at its headquarters in Edison, NJ.

“Maria’s expertise and emphasis on health and beauty is a natural addition to what we’re doing,” said Jeff Wolpov, senior vice president of ecommerce for Ryder. “On some larger emerging brands that we recently won Dotcom was in the mix as well. Accounts that would outgrow them were a natural fit for us. Now no one can outgrow them. Some smaller opportunities we have fit nicely in what they do.”

Both Cart.com and FB Flurry, along with Weber, Geodis and Seko, have been listed in Multichannel Merchant’s Top 3PL directory.