or an all-star salesperson . If M & A is a significant part of the growth story , it is more credible to have successfully executed at least one in the past and curate a warm list of targets with whom there is active dialogue . There are myriad ways to grow , but the key is to pick what works for your business and execute it according to plan .
Finally , remember that private equity investors are typically investing first and foremost in a team . They are not business operators , and the best ones don ’ t pretend to be . They are there to support good teams with resources like capital , know-how , team building , customer relationships , and growth strategy . Ultimately , their incentives are well-aligned with yours — to grow the business and make a significant return on their ( and your ) investment .
The Role of Technology
Like other areas of logistics , such as freight brokerage , technology has transformed how last-mile businesses operate over the past decade , in most cases for the better . Technology can add e ! ciency to every aspect of the business , including dispatch , routing , track-and-trace , billing , and much more . In January 2024 , Amazon announced that its $ 1 billion Industrial Innovation Fund would begin targeting startups in last-mile technology . The behemoth is investing heavily in its own last-mile network ( along with other large retailers like Walmart and Target ).
By contrast , smaller last-mile operators generally lack the investment firepower to drive results through entirely internally developed and proprietary technology solutions . The good news for these players is that the market is rapidly evolving behind third-party solutions . Companies like DispatchTrack ,
Omnitracs Roadnet , nuVizz , and others embed artificial intelligence , machine learning , and other tech constructs in off-the-shelf transportation management applications .
“ Third-party ” shouldn ’ t necessarily be considered a bad word when it comes to tech . Ultimately , what matters is a demonstrable return on investment and a differentiated winning strategy in the market , perceived as such by customers with last-mile needs who value the overall solution . One emerging answer is to combine the best components of foundational third-party technology and build a proprietary layer on top of those components to deliver a unique targeted solution to shippers and carriers .
Ultimately , there will be more than one flavor of winning technology strategy for last-mile carriers .
That said , a total lack of technology strategy is unlikely to be one of the winning flavors .
Middle-market operators must either develop a stand-alone technology game plan or join a larger platform that already has one . CLDA
Burke Smith is a Managing Director who leads Houlihan Lokey ’ s Transportation & Logistics ( T & L ) practice . Philip Keffer is a Director and Nathan Feldman is a Vice President in the T & L team . Houlihan Lokey is a global investment bank with expertise in mergers and acquisitions , capital markets , financial restructuring , and financial and valuation advisory . For more information , go to HL . com .
46 customized logistics & delivery Magazine I fall / winter 2024