UPS - 3 Air-Freight & Cargo Stocks to Watch in a Promising Industry | Benzinga
The Zacks Transportation - Air Freight and Cargo industry faces challenges, ranging from inflation-induced elevated interest rates to concerns pertaining to supply-chain disruptions and the slowdown of economic growth.
Despite the abovementioned challenges, we believe that the space still has fuel left in the tank, especially for operators that target growth opportunities and undertake cost-reduction initiatives. Even though economies are reopening, consumers' thirst for online shopping is rampant. Cost-cut efforts to drive the bottom line are commendable as well. In view of these favorable developments surrounding the space, we advise investors to focus on United Parcel Service (NYSE: UPS), FedEx (NYSE: FDX) and GXO Logistics (NYSE: GXO).
About the Industry
The companies housed in the Zacks Transportation - Air Freight and Cargo industry provide air delivery and freight services. Most players in the space are involved in offering specialized transportation and logistics services. Some participants offer a range of supply-chain solutions, such as freight forwarding, customs brokerage, fulfillment, returns, financial transactions and repairs. The well-being of the companies in this industrial cohort is directly proportional to the health of the economy. Major industry players, including UPS and FedEx, transport millions of packages each day across the globe. Apart from operating a ground fleet of multiple vehicles, some of these companies also maintain an air fleet. While some players focus on providing air transportation services for passengers and cargo, others deliver services to entities that outsource air cargo lifting needs.
4 Key Trends to Watch in the Transportation-Air Freight & Cargo Industry
Strong Financial Returns for Shareholders: With economic activities gaining pace from the pandemic lows, more and more companies are allocating their increasing cash pile through dividends and buybacks to pacify long-suffering shareholders. This underlines their financial strength and confidence in the business. Among the Transportation – Air Freight and Cargo industry players, FDX announced a 10% increase in its quarterly dividend in June 2024.
Focus on Cost-Cuts to Drive Bottom line: Despite signs of cooling inflation, the measure is still ...