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Transportation Brief: M&A Considerations for Air and Ocean Forwarders

by Braden K. Core, Nathaniel G. Saylor

February 22, 2022

Freight forwarders that engage in air and ocean moves have become attractive targets for strategic and private-equity-backed acquisitions over the past several years. Buyers should be aware that change-in-control notice and approval processes for these businesses are more complicated when compared to U.S. surface-transportation providers.

For air forwarders registered with TSA as Indirect Air Carriers (IAC), notice of a change-in-control must be provided to the agency. Depending on how the transaction is structured (e.g., changes to corporate form, EIN), a new IAC application may be required. A purchase transaction may also result in the creation of new “Principals” that require Security Threat Assessments and vetting by TSA. Similar considerations apply if the target is registered with TSA as a Certified Cargo Screening Facility.

Many IACs are also registered with CNS as Endorsed Cargo Agents. A specific form of notice must be provided to CNS. That notice triggers an amendment process that must be completed to ensure the target’s information on file with CNS accurately reflects the new ownership.

Finally, in certain situations, IACs may need to be registered with the DOT as foreign air freight forwarders (FAFFs). Sometimes foreign ownership is obvious, such as when a foreign business buys a U.S.-based IAC. But in some cases, an IAC will be deemed “foreign” based on the presence of non-U.S. investors in a private-equity fund. There may be pre -and post-close processes associated with changes in control of FAFFs.

With respect to forwarders engaged in ocean moves, the Federal Maritime Commission (FMC) requires notice of change-in-control, as well as additional information submitted to the agency. FMC also requires that such entities have “Qualifying Individuals” on staff. If a transaction will impact the identity of the QI, the parties will need to plan accordingly. If a corporate conversion is contemplated that would result in a new entity form, prior approval is technically required as opposed to after the fact notice. Where an asset acquisition is contemplated, an entirely new application may be required (or advisable), which can take months to obtain, further complicating and delaying transactions.


Scopelitis’ Transportation Brief® is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.


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