First Research US Industry Profile

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Transportation Services Sector
SIC Codes: 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47
NAICS Codes: 48, 49
Last Quarterly Update: 5/27/2019
Companies in this industry provide air, rail, truck, and waterborne transportation; transit and ground passenger, pipeline, postal, courier and messenger transportation services; and warehousing and storage services. Major companies include Union Pacific, United Continental, UPS, US Postal Service, and YRC (all based in the US), as well as AP Moller Maersk (Denmark), Deutsche Lufthansa and Deutsche Post (Germany), and East Japan Railway and NYK Line (Japan).
The global transportation services sector is concentrated in large, heavily industrialized nations such as the US, China, Japan, Germany, and France. Emerging economies with growing middle classes present opportunities for market expansion. Countries in Asia, particularly China and India, are being targeted for industry growth.
The US transportation services sector includes about 230,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $895 billion.
Competitive Landscape
Transportation services companies depend highly on the health of the global economy, which affects manufacturing output, commodity trade, consumer and business spending, and business and leisure travel activity. Because many costs are fixed, the profitability of individual companies is determined by efficient operations and on favorable fuel and labor costs. Large companies enjoy economies of scale in purchasing and the ability to provide more extensive services. Small companies can compete by serving local or regional areas. The US industry is fragmented: the 50 largest firms generate about 40 percent of industry revenue.
Competitive Advantages:
IT Integration - Companies across the transportation sector rely on complex information systems to track cargo, manage schedules, optimize routes, and monitor performance. To remain competitive, providers must also continuously develop and upgrade customer-facing technologies such as mobile apps and Web-based tools for scheduling and tracking transportation services.
Managing Fuel Costs - Fuel is the largest operating expense for many transportation service providers. Companies may engage in financial hedging strategies to protect themselves from variable fuel prices. Locking in low fuel rates and guarding against future price spikes is crucial for maintaining profit margins.
Targeting Emerging Markets - Much of the industry's growth potential lies in regions with emerging economies. Market growth in Asia is expected to outpace industry expansion in established economies in North America and Europe over the next decade.
Companies to Watch:
American Airlines is the largest airline in the world by most metrics, operating an average of nearly 6,700 flights per day to nearly 350 destinations.
AP Moller Maersk has transportation holdings ranging from the world's largest container shipping company (Maersk Line) to freight forwarding and supply chain management services (Damco).
Didi Chuxing - Uber may have led the vehicle-for-hire revolution, but China-based Didi is currently the world's largest ride-sharing service provider.
Space Exploration Technologies - Going where few have gone before, SpaceX has been at the forefront of private space transportation.
UPS is the world's leading package delivery company and a major provider of trucking and freight forwarding services.
Products, Operations & Technology
Major industries within the transportation services sector include airlines, trucking, railroads, waterborne transportation, transit and ground passenger ... plus:
Sales & Marketing
Finance & Regulation
Regional & International Issues
Human Resources
Also includes the following chapters:
Quarterly Industry Update
Industry Indicators
Business Challenges
Trends and Opportunities
Call Preparation Questions
Financial Information
Industry Forecast
Industry Websites
Glossary of Acronyms

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