Kewill buys LeanLogistics in combination of big TMS players
Kewill Inc. has bought rival transportation management systems (TMS) developer
LeanLogistics Inc. from its Australian parent Brambles Ltd. for US$115 million, a
global combination of two major players in
the increasingly busy hosted TMS segment.
The acquisition creates a combined TMS
platform with more than 14,000 carrier
partners that make up the largest network
of any North American provider, the companies said. The combined firms manage
more than $10 billion in annual freight
spend, they said.
The combination brings Lean heavily
into the TMS segment that supports parcel
operations, which has long been a strength
of Kewill’s. Chelmsford, Mass.-based Kewill
gains access to Lean’s “LeanDex” software,
which compares truckload rates across
North America by aggregating shipper-car-rier transactions for dry van and refrigerated shipments. Kewill said in a statement
that many of its 7,500 customers worldwide
will find the application useful.
The deal integrates Lean’s U.S. and
European presence with Kewill’s European
and Asian network, according to the companies. The compact will also strengthen
services that support yard management
and rail shipment tracking and settlement
operations, the firms said. Lean has relied
on the deep pockets of its parent to finance
its geographic and portfolio expansion.
Under the deal, Lean will remain in
Holland, Mich., and become Kewill’s largest office, the firms said. In the statement,
Kewill CEO Doug Braun said the company
“intends to build around this office and
leadership team in the coming months.”
MARKET CONSOLIDATION
The announcement is one of the biggest
moves yet by focused TMS providers to
amass share in an active and growing segment of the supply chain. Increasingly,
technology is viewed as the differentiator
in a commoditized business like physical
distribution. Third-party logistics providers
(3PLs) add value by leveraging TMS func-tionality to support a broad and growing
range of services.
“Acquiring firms are gaining not
just strong books of business, but
relatively young technology platforms designed to profitably support agile logistics services,” said
Monica Truelsch, marketing director for TMW Systems Inc., a TMS
provider in Mayfield Heights,
Ohio.
Fabrizio Brasca, vice president of
global solution strategy for intelligent fulfillment at JDA Software
Group Inc., another TMS provider,
said a consolidation phase is inevitable as the many smaller “
software-as-a-service” (SaaS) providers that
have entered the market during the
past decade now see the need to
become part of larger organizations.
The combination benefits
LeanLogistics by allowing it to fur-
ther expand its global reach, accord-
ing to Brasca. “It is very difficult for
a smaller solution provider to grow
internationally, because the experi-
ence required to grow in a market
outside North America is a chal-
lenge in cost and effort,” he said.
Truelsch said the firms best positioned for any consolidation would
be those whose systems can integrate asset and nonasset-based
operations. “They best reflect the
‘hybrid’ operations we increasingly see as trucking, brokerage, and
third-party logistics services continue to converge,” she said. “
Best-of-breed but silo applications will
tend to lose out to networked and
hybridized planning and execution
platforms.”
—Mark Solomon with Ben Ames
