Trucking companies are merging at a rapid pace. One possible cause of the merger frenzy is new regulation mandating drivers use electronic logging devices (ELDs) that track when they are driving. The measure is aimed at enforcing rules on how many hours truckers can drive, but they could also decrease productivity among trucking firms, forcing them to merge up to remain competitive. Eric M. Johnson and Nick Carey report at Reuters:
There have been 44 publicly announced freight movement and logistics deals within the U.S. so far this year, according to Thomson Reuters data, already topping the 38 deals announced in 2016. And the total is likely much higher because most deals are private, said Todd McMahon, managing director at investment bank Capstone Partners.
Trucking companies by late December must start using electronic logging devices, known as ELDs, to track the number of hours drivers are behind the wheel.
The new mandate makes it harder for trucking firms to dodge federal limits on the hours drivers can work and will likely cut into productivity, trucking industry officials have said. That would pressure already razor-thin margins at smaller trucking firms, fueling consolidation.
Executives at larger trucking companies and private equity firms have said they are aggressively hunting for deals.
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