Major international logistics giants are collapsing one after another! Are domestic logistics companies faring any better?

As the market evolves, it’s time. “Thinking of change”!

Lately, news of international logistics giants collapsing or being acquired has been rampant—many of them century-old industry leaders—and the fallout has invariably been either layoffs or bankruptcy liquidation.

On October 19, Convoy, one of the largest internet-based freight‑transport platforms in the United States, abruptly announced that its core operations had been shut down and that nearly 1,000 employees would be laid off en masse.

On October 18, reports indicated that both DSV, which is looking to divest, and Deutsche Bahn Group—the parent company of DB Schenker, which is set to be sold—have been sending out positive signals one after another, suggesting that the merger between DSV and DB Schenker may soon go through. In a new report, investment bank DNB Markets noted that, according to its latest estimates, the acquisition price for the German logistics giant DB Schenker could reach a record-breaking €13 billion (approximately $13.8 billion). Meanwhile, DSV remains the clear frontrunner, given its strong financial position and ability to take on such a sizable acquisition target.

On October 18, Byggmastare Anders J Ahlstrom AB, one of the largest shareholders in the Swedish electric-vehicle startup, announced on its official website that Volta Trucks AB has decided to file for bankruptcy.

On October 10, DHL announced that it has signed an agreement to acquire 100% controlling interest in Danzas AEI Emirates, further solidifying its position as the leading logistics provider in the GCC (Gulf Cooperation Council). Upon completion of the acquisition, Danzas, with a history spanning 208 years, will be fully integrated into DHL’s brand operations.

On October 8, Sunset Logistics, a logistics company headquartered in Michigan, USA, abruptly announced it was ceasing operations, citing economic downturn and the failure of its lenders to pay the wages of its 90 drivers and employees. Founded in 1988, Sunset Logistics has a history spanning 35 years.

On October 8, it was reported that Elmer Buchta Trucking, a venerable Indiana-based logistics company with an 85-year history, along with its affiliates, has filed for bankruptcy protection.

On September 26, KNP Logistics Group, the parent company of Knights of Old—the long-established European freight forwarder and the UK’s most renowned cargo carrier—formally entered bankruptcy administration last week.

A bit earlier In early August, Yellow, a U.S. trucking giant with nearly a century of history, announced its bankruptcy and immediately ceased operations, leaving approximately 30,000 employees jobless…

▍ Three Major Reasons That Should Not Be Overlooked

In reviewing these companies that have collapsed or During the process of being acquired, it becomes apparent that the primary reasons are concentrated in the following points:

First, from the perspective of economic development, the decline in global trade volumes and manufacturing output has directly led to a drop in demand for logistics services. In other words, many industry giants have been forced to collapse due to economic downturns, sluggish cargo volumes, and a sharp reduction in demand. For example, The primary reasons for Convoy’s closure of its core business were a severe downturn in freight volumes and a contraction in capital markets, which together ultimately stifled the company’s further growth. As for Sunset Logistics, it ceased operations due to the economic slowdown and had been mired in financial difficulties since March.

Second, from the perspective of industry competition, an increasing number of low-cost rivals are entering the freight sector. Coupled with inherently modest profit margins, rising labor costs, and sharp increases in fuel prices, companies lack the resources to invest in technological upgrades, further squeezing profit margins in the logistics industry and leaving corporate growth stuck in a state of stagnation.

Third, from the perspective of internal management, inadequate corporate governance, excessive internal debt, and insufficient cash flow constitute significant constraints on the company’s development. For example, companies that have gone bankrupt… Yellow Inc. incurs annual interest expenses as high as US$100 million, far exceeding its profits. Moreover, since 2019, the company has faced a shrinking business environment: revenue has remained stagnant, financial difficulties have grown increasingly acute, losses have persisted for several years, and its cash flow has steadily dried up.

Under the triple pressures of the macroeconomic environment, industry competition, and their own operational challenges, many of the aforementioned international logistics giants failed to weather the difficult period and ultimately collapsed. It was once thought that, having survived the pandemic, … During the “darkest moment,” the entire industry was poised for a major phase of growth—yet the harsh reality that “snow doesn’t feel cold until it melts” has made life even more difficult for logistics companies.

▍ What is the situation like for domestic logistics companies?

If even international logistics companies are facing such challenges, have domestic logistics firms fared any better since the beginning of this year? Perhaps the answer can be found by examining three key dimensions.

From the perspective of freight volume,

Let’s start with a set of figures released by the Ministry of Transport: in the first half of the year, commercial freight volume reached… 25.93 billion tons, up 6.8% year on year, with the second quarter posting a year-on-year increase of 8.4%. By mode of transport, road freight volume reached 19.01 billion tons, up 7.5% year on year, while waterway freight volume totaled 4.42 billion tons, up 7.7% year on year. National ports handled a cargo throughput of 8.19 billion tons, an increase of 8.0% compared with the same period last year.

As can be seen, both road freight and waterway transport have recorded a certain increase. Now let’s look at another set of data: In the first half of 2022, commercial freight volume totaled 24.27 billion tons, down 2.2% year on year; in April 2022, the decline was 9.9%, the largest drop in nearly two years. By mode, road freight volume reached 17.71 billion tons, a year-on-year decrease of 4.6%, while waterway freight volume stood at 4.10 billion tons, up 4.5% year on year.

In Building on the decline in freight volumes in 2022 due to the pandemic, freight volumes in the first half of 2023 did increase, but this growth is not representative and merely indicates a slight improvement over 2022; the industry’s recovery remains ongoing.

Let's take a look at the past. Changes in freight volume over five years: From 2018 to 2022, commercial freight volumes totaled 50.629 billion tons, 46.224 billion tons, 46.440 billion tons, 52.160 billion tons, and 50.663 billion tons, respectively.

Now let's take another look. From 2018 to 2022, the annual freight volume on highways was 39.569 billion tons, 34.355 billion tons, 34.264 billion tons, 39.139 billion tons, and 37.119 billion tons, respectively; the number of cargo vehicles stood at 13.5582 million, 10.8782 million, 11.1028 million, 11.7326 million, and 11.6666 million, respectively.

Clearly, changes in freight volumes can reflect economic trends. Since 2018, the economy has been on a weakening downward trajectory, and the pandemic has once again dealt a blow to economic growth, leading to corresponding changes in the number of trucks on the road.

From the perspective of oil price fluctuations, at the cost level…

As is well known, logistics services comprise three major components: transportation, warehousing and storage, and management. Among these, transportation costs account for a significant share of total expenses, making transport cost one of the primary cost drivers in the logistics industry. Meanwhile, China’s road freight market ranks first globally in overall size, accounting for more than of the country’s total freight volume. 70%. Among the various cost components of road freight, fuel costs constitute a significant portion of transportation expenses, accounting for roughly 30% of total transportation costs and representing one of the largest expenditure items. Consequently, fluctuations in fuel prices can have a substantial impact on road transport profitability.

As On the evening of October 10, oil prices fell again. So far this year, among the first 20 price adjustments, there have been 10 increases, 7 decreases, and 3 instances where adjustments were suspended. After offsetting these rises and falls, cumulative price hikes stand at 970 yuan per ton for gasoline and 935 yuan per ton for diesel. In terms of per-liter changes, 2023 has seen a total increase of more than 0.77 yuan per liter. On October 24, another adjustment took place: domestic gasoline and diesel prices were both reduced by 70 yuan per ton. On a national average, 92-octane gasoline fell by 0.05 yuan per liter, 95-octane gasoline by 0.06 yuan per liter, and No. 0 diesel by 0.06 yuan per liter.

The rise in oil prices, which has driven up transportation costs, has become an undeniable reality and affects different stakeholders in varying ways. For example, it imposes a heavier burden on individual operators, small and micro‑size transport enterprises, and even franchise‑based firms—entities with limited bargaining power in the market—whereas large, nationwide companies typically have the capacity to absorb the additional costs resulting from higher fuel prices.

of Debang Express Taking 2022 transportation costs as an example, despite a year-over-year average increase of over 30% in oil prices, Debon’s transportation expenses rose by only 0.73% compared with the previous year. By boosting the share of company‑owned capacity, optimizing routing, and improving vehicle utilization, the company effectively contained the overall growth in transportation costs, demonstrating its ability to manage operating expenses.

In addition, industry forecasts for the future trajectory of the freight‑capacity market are also pessimistic. First, there is concern that the ongoing decline in capacity will not reverse in the second half of this year or next year; second, freight rates continue to fall, prompting a wave of individual drivers to exit the market; and third, the evolution of the capacity‑supply model remains uncertain—whether it will eventually consolidate into a large‑fleet structure or become increasingly fragmented, disorganized, and small‑scale remains an open question.

The lingering effects of the pandemic have disrupted the balance between supply and demand, resulting in a severe oversupply of capacity in the road freight market, a sharp plunge in freight rates, and persistent cutthroat competition. Coupled with rising costs such as fuel prices, this has left many logistics companies… “ Tighten one’s belt “Living day by day.”

From the perspective of market competition,

The “2023 Survey Report on the Business Environment for Logistics Enterprises,” released in August, indicates that more than 30 percent of private‑sector logistics firms have experienced a decline in operations, while state‑owned logistics enterprises have remained relatively stable. According to the survey data, the three most pressing challenges currently facing logistics companies are intense market competition, high operating costs, and an overall lack of market demand, accounting for 78.6 percent, 61.96 percent, and 43.24 percent, respectively.

It is clear that fierce market competition, particularly price‑driven rivalry, has become an intractable bottleneck for businesses. In a relatively sluggish market environment, companies often resort to slashing prices to survive and capture greater market share—this is a normal market dynamic. However, excessively low pricing inevitably leads to a sharp erosion of profits, and such price wars will inevitably force some firms out of business.

Some time ago, The buzz around “logistics and transport fleets starting to sell vehicles” vividly reflects the broader cooling trend: first, there are simply too many trucks on the road, with supply outstripping demand; in the past two years, many drivers have purchased new vehicles still under loan, so even at rock-bottom rates, there are still plenty willing to take the job. Second, freight volumes in the market have noticeably declined. With more trucks competing for fewer shipments, shippers are pushing hard to drive down rates—and once again, it’s the drivers who end up bearing the brunt of this price pressure.

On one hand, logistics and express delivery companies are increasingly mired in negative growth and losses; on the other, cutthroat price competition continues unabated. Everyone in the industry knows that such low‑price rivalry is unsustainable, yet they feel compelled to join in. As a result, some have managed to weather the storm by leveraging capital to transform and upgrade their operations, while others, unable to endure, have been forced out of the market.

And for a long time to come, low‑price competition in the logistics sector will persist, leading to the elimination of many companies. Of course, a new wave of logistics startups will also emerge. All players can do is adapt to market changes by… “ Thinking of change ”, rather than simply waiting.