The Logistics of Logistics Logistics Industry Outlook with John Larkin
John Larkin and Joe Lynch discuss the logistics industry outlook. John is Strategic Advisor of Transportation & Logistics at Clarendon Capital, a private equity sponsor focused on developing investment opportunities and providing strategic advisory services to the transportation, logistics and distribution sectors.
About John Larkin, CFAJohn G. Larkin, CFA is a Strategic Advisor to Clarendon Capital. John Larkin was named an Operating Partner at Clarendon Capital in May of 2019. In April of 2021, Mr. Larkin became Strategic Advisor at Clarendon, and was named Chair of the firm's Advisory Board. His mission is to help craft the firm's growth strategy while assisting with deal sourcing, capital raising, and the creation of value within portfolio companies. Clarendon remains 100% focused on the transportation & logistics industry, broadly defined. Previously, Mr. Larkin joined Legg Mason (later sold to Stifel, Nicolaus & Company, Inc.) in October 2001 to form and to lead the firm's entry into the transportation markets. For 17 years, Mr. Larkin headed up Stifel's transportation and logistics research effort. In January of 2018, Mr. Larkin transitioned from Stifel's Research Department to Stifel's Investment Banking team. While in Investment Banking, Mr. Larkin advised numerous publicly traded and privately held transportation and logistics companies as well as many financial sponsors with investments in the transportation and logistics space. Over the years, Mr. Larkin has been recognized as an all-star analyst by Institutional Investor magazine numerous times, a Wall Street Journal All-Star analyst on several occasions, and has been awarded multiple Starmine stock picking and earnings estimate accuracy awards. Previously, Mr. Larkin has served as: Chairman and CEO of RailWorks Corporation, Managing Director with Alex. Brown and Sons' transportation team, AVP - Planning and Analysis at CSX Transportation, Inc., Systems Engineering Consultant with Day & Zimmermann, Inc., and a Research Associate at the Center for Transportation Research (at the University of Texas at Austin). Mr. Larkin earned his MBA from Harvard University in 1984, a Master of Science degree in Civil Engineering from the University of Texas at Austin in 1978, and a Bachelor of Science degree in Civil Engineering from the University of Vermont in 1977. Mr. Larkin is a CFA charter holder. In addition, he is Vice Chairman of Crown Diesel, and a member of The Board of Directors for CRST International, eNow Energy, Cub Ventures (CDLife), Novapath Supply Chain Systems & Rygen Technologies, and Phoenix Intermodal. He also serves on the Boards of Advisors for Freightwaves, Haul, LoadSmart, DFMData, Baton, On-ramp Payments, Leaf Logistics, Truckl.io, and LineHaul Station. Additionally, Mr. Larkin is an Advisor to Bakken Energy and Hoptek and is a member of Aurora's Industry Advisory Council. Mr. Larkin is married and is the proud father of four adult children (Conor, Clifford, Casey, and Sarah Alexandra). He resides, with his wife of 38 years, Nancy, in Dallas, TX, Baltimore, MD, and Saranac Lake, NY, and on Water Island, USVI.
About Clarendon CapitalClarendon Group is private equity sponsor focused on developing investment opportunities and providing strategic advisory services to the transportation, logistics and distribution sectors. Their principals possess unique resources, expertise, and partnership networks to add value to companies and execute transactions. The team collectively has over 75 years of industry experience as principal investors, board members, senior operators, management consultants and investment bankers. The principals have engaged on over 60 investments and assignments in the sector, working with their partners and clients to achieve agreed upon objectives.
Key Takeaways: Logistics Industry Outlook- John Larkin, CFA is a Strategic Advisor at Clarendon Capital and to a number of transportation and logistics companies.
- In the podcast interview, John shared highlights of his long, successful career in the transportation and logistics industry. During his career, John has worked closely with many of the leading companies in the transportation and logistics space.
- John also shared his logistics industry outlook which includes insights on the truckload, LTL, and freight brokerage markets.
- In the truckload market, John believes that the industry consolidation will continue. He believes that some of the larger carriers who currently have 1.0 to 1.5% market share could grow to have 3.0% or 4.0% market share in the next decade.
- The larger carriers often have an cost advantage over smaller carriers because their size enable them to get volume discounts.
- In the freight brokerage space, larger established players are buying up smaller companies and also investing heavily in technology.
- John also believes that larger carriers will be more likely to benefit from autonomous trucking technologies.
- The freight brokerages who have made big technology investments often have a lower cost per load, which means they are going to be more competitive or more profitable. Many freight brokerages are also partnering with staffing and technology firms like Lean Solutions Group to reduce their costs, while gaining access to talented people based in lower cost countries.
- A large number of logistics technology companies have emerged to help small and mid-size brokers keep pace with the larger brokerages who develop their technology in-house.
- In the LTL market, John discussed some of his favorite carriers like Old Dominion and talked about the difficulty potential carriers have when attempting to enter the LTL space.
- Overall, John believes that the transportation and logistics industry performed very well during the pandemic.
- The industry faces many challenges including inflation, war in Ukraine, re-emergence of COVID in China, potentially softening market, etc., so the stability and predictability we all hoped for probably isn't coming any time soon.
- Clarendon Capital is focused on partnering with investors, owners and management teams to build quantifiable value in their business over a mutually agreed timeframe.
- Clarendon's engagements and investments have spanned from several months to over a decade. Their capabilities in the transportation and logistics industry give them a perspective necessary to substantially add value to the organization.