Merger assessment for two major North American trucking companies
Merger assessment: For two major North American trucking companies, Oliver Wyman assessed the impact that a merger or consolidation would have on the companies’ revenues from their LTL traffic base. The clients were aware that the consolidation of two carriers within the same industry carried a high likelihood of revenue attrition due to rate differences and customer reaction, and wanted to gauge the magnitude of the threat. Oliver Wyman built a detailed picture of the differences in revenues and profitability for the two carriers by length of haul, type of payment, and shipment class, and then determined the overlap in customers and customer movements between the two carriers and the likely impact on revenue. Oliver Wyman also estimated potential revenue attrition that could occur due to other factors, including carrier diversification, quality issues, and customer renegotiation of rates.