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buy, build, or bridge?

The Long and Winding Road to Transport Sector Growth 

PHC’s Managing Partner Nick Pannell looks at competing growth strategies in the post-pandemic transport sector, and wonders whether a“build” strategy is overrated……. 


Transport trends haven’t changed, but accelerated.

COVID-19 caused a temporary downturn in commercial transport traffic and has resulted in irreversible changes to working patterns and corporate mobility. What is more, it’s upset the balance in our competitive landscape – punishing certain players while rewarding others. While parcels and last-mile-delivery segments have boomed, some estimates put corporate fleet segment downturn at between 55 and 60%. 

There were widespread predictions that the underlying trends in commercial transport and corporate fleet segments would change as a result of the pandemic. They haven’t changed: they’ve accelerated. 

Commercial transport operators were already demanding greater control of driver behaviour, vehicle movements and on-road expenditure: those demands have intensified. Corporate fleets were already demanding greater convenience, deeper integration of services and simpler cost understanding: those demands have become more urgent. 

So there will be glittering prizes for those service providers who respond most quickly and compellingly to intensified transport and mobility customer demands. But how will they do it?  

Will they build out services in-house using their own product development resources? Will those with liquidity or deep-pocketed shareholders snap up competition and new technology challengers? Or will players with synergies build bridges into strategic partnership? 

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Everything “as a service” 

One thing is for sure: neither commercial transport nor corporate fleet operators will any longer be prepared to deal separately and with distinct providers for each element of their requirements. Only the very largest road freight and haulage firms will buy fuel, tolls, VAT recovery, insurance, load-broking, ferry booking, secure parking and scheduling services from different providers. Only the very biggest, multi-national corporate fleets (if any at all) will be interested in separately negotiating finance leases, vehicle maintenance, fuel payments, EV-charging, T&E expenditure and expense management workflows. 

You may be bored of hearing it, but all this stuff is being pulled together and offered “as a service” through integrated cloud platforms,with neat operator interfaces.  

Which makes the role of the integrator critical, doesn’t it?   

Be careful what you wish for 

Integrated services can be pulled together and offered in many ways, and we’ve observed a growing tendency for larger companies from one service “silo” to want to build out their own range of extended, value-added services through in-house development. As if this were the most effective way to generate acceptable returns, manage costs-to-serve and build market presence. Is it? 

There are several critical success factors for what we’ll call “self-build integrators”. Yet, however much companies might think it’s sexiest to play that role, and therefore want to build integrated propositions themselves, there are many, many pitfalls. 

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Three things to figure out if you decide on a “Build”strategy 

1. Brand stretch 

Just because you can do something doesn’t necessarily mean that you should. The question is, how far will your brand stretch? Here, companies risk getting carried away with how far their own brand will take them. Extending an offer from fuel cards into employee expense management, for example, may seem like a natural extension right up to the point where nobody buys it.  

Before stretching your brand, test its elasticity, and test it hard. In the market’s eyes, you may well not be the natural service integrator you think you are.   

2. Platform capability 

Now this may seem obvious, eh? But you’d be surprised at the number of examples there are of ambitious, visionary marketing teams with generous budgets building out gleaming, next generation, digitised services before finding out that a creaking, cumbersome platform won’t support them effectively. 

Some of the more famous fuel card platform replacement projects in recent years have resulted only in duplicating legacy capability, rather than providing for an innovative future functional roadmap. 

Platform upgrades are expensive. In-house IT resources are scarce. Getting it wrong is calamitous, and can result in damaged customer relationships, vast cost overruns and the withdrawal of the new products and services you’ve spent years and millions building. 

Before you build, make sure your tech stack stacks up. 

3. Can you sell it? 

I know, we picked this up in a previous feature which you can read here. But it bears repeating, doesn’t it? 

Sales teams don’t just have time constraints, they have skill and capability constraints too. Selling complex, integrated services is a whole different ball game to selling tolls, or tyres,or engine oil.  

Many salespeople are home ground players, naturally focusing on the products and services they feel most comfortable and confident with. Training them to sell brand new services can and will be difficult and expensive, with little if any guarantee of success (however much you spend) – and replacing them takes you into a world of complicated and tricky HR challenges. 

So, before deciding that in-house is best, challenge yourself on whether your sales team can really sell the new services you are building. Versatility tends not to be the salesperson’s strongest suit. 

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“Bridge”: a more elegant growth strategy for post-pandemic transport?

With strong product, service and brand synergy, a fair multiple and a robust integration and 1+1=3 value-add plan, "buy" is a credible service palette extension strategy for those companies with the necessary capital and post-acquisition integration capacity (we’ll pick that last point up in a later blog). 

As we’ve just described, there are numerous things to watch out for if you are determined to take on the "build" minefield – let alone the costs, resources and timelines involved. A "build" service extension strategy is to be treated with extreme caution. 

So why is it that so many service extension strategy choices seem binary? Time and time again you hear “build or buy” when there is a third option. And a very compelling third option at that. 

A far more effective strategy in fractured markets, with impatient shareholders and an imperative to build back lost revenue might be "bridge". Current market conditions shout out very strongly for strategic partnership. 


Strategic alliance allows companies to blend service offers; lower deployment cost and risk; get to market far quicker than either buying or building; share channel sales and marketing resources and capability; cross-sell to complementary customer bases; lower the cost of training sales and customer service staff, and cross-utilise those resources; effectively associate brands and – to get back to where we started – meet evolving customer demands quickly and flexibly.   

Worth considering, eh? 

If you’d like to find out how PHC’s expert partners can use their knowledge, experience and contacts to support you in building strategic alliances and/or channel partnerships, please contact Nick on 

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