IBA, as the premier business brokerage firm in the Pacific Northwest, is firmly established as a respected professional service firm in the legal, accounting, banking, mergers & acquisitions, real estate, and financial planning communities.  Periodically, we will post content from professionals on the IBA team with knowledge to share for the good of owners of privately held companies & family owned businesses. The following blog article has been provided by Vishal Punj of IBA. Mr. Punj is a successful entrepreneur, MBA degreed professional who combines his corporate, academic, and personal business experience to provide quality representation with superior customer service to his business sale clients.

Selling a Trucking or Logistics Company in 2023

Prior to the pandemic and the associated supply chain issues that we’ve all experienced or read about incessantly over the past couple years, the movement of goods from one place to the other was a business that most of us didn’t spend a whole lot of time thinking about.  I suppose part of that could be attributed to the fact that it’s simply more entertaining to postulate on the next steps for the Twitter’s, Amazon’s, and Facebook’s of the world.  What the pandemic proved to the world is that logistics is the lifeblood of any economy and can wreak havoc if not managed properly.  General Dwight D. Eisenhower has been quoted as saying “You will not find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics.”

Both buyers and sellers of logistics companies have understood this dynamic for a long time, especially in today’s world where expectations around the delivery of product have changed with both the end consumer and business customer.  What that means for Sellers is that if they have a long history of customer relationships and being able to deliver product in a timely fashion, all the while being able to communicate to the customer where in the supply chain their product is – that Seller will find a robust market for their business.  A trend we started to see before the pandemic that has since accelerated is a desire for Buyers to acquire other aspects of the supply chain where they lack expertise.  A good example of this is a deal that I closed in December of last year.  My client had a long haul, flat bed trucking business whose clients included specialized robotics manufacturers and lumber companies (products that do not fit into a standard 18-wheel semi) who needed shipping to the Midwest and East Coast.  It was a good business with a great reputation in the industry.  That alone would have been enough to explain the amount of interest I received in the company.  However, my client had three distinct things going for the company that made it especially compelling.

• Buying a business involves a certain element of risk. A way to reduce that risk is to have other revenue streams that can offset a down year in another line of business. In addition to the trucking business, my client also had a brokerage company that served the interests of the trucking business in that whatever freight the trucking company could not move, the brokerage could find a carrier for that freight and take a commission.  Both were included in the sale.  Although the two businesses worked together, they could be operated independently of one another.  In this way the owners were able to pivot when necessary and not be completely dependent on either the trucking or brokerage business if either one faced a problem.
• It’s no secret that the past few years has seen increased interest from investors in industrial real estate. This has generally meant that lease rates have gone up, especially in markets such as western Washington where there is a dearth of land available for industrial use.  My client’s business had a long-standing lease on a two-acre plot of land that was right off a major interstate highway, making long haul trucking efficient while also being close to the port, which made it an ideal location for drayage operators as well.  The Buyer for this business happened to be in drayage and recognized the value of the location immediately.   Adding frosting to the cake was the fact that the landlord was amenable to writing a long lease with the new Buyer at a rate that was below market.
• Driving trucks is a tough job, and many long time truck drivers are nearing retirement age. As is the case with other industries, there is a wide mismatch between the demand for truckers and the supply.  If you’re in the industry, then you recognize that having a loyal team of drivers is worth its weight in gold.  My clients recognized this early on and consistently paid their drivers fifteen percent above market, in addition to creating a culture that fostered transparency, open communication and trust.  Some of the drivers had been with the company for over fifteen years!  This translated to consistency for the Buyer and a successful platform upon which to further grow the team.  Happy employees have a way of spreading their enthusiasm.

If you own a logistics company and are thinking of passing the baton to someone else, or you’ve already reached the point where you know for sure that you want to exit, the good news is that there are a lot of eyeballs on the industry right now.  Feel free to contact me for a complimentary and confidential evaluation of your business.  All communication will be held in strict confidence.

If you have questions relating to the content of this article or selling a privately held company or family business in the Trucking or Logistics industry, Vishal Punj would welcome the opportunity to talk with you.  Mr. Punj can be reached at (425) 454-3052 or vishal@ibainc.com.

IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, real estate, legal, and accounting communities on subjects relevant to the purchase & sale of privately held companies and family-owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.