The transportation industry’s recovery is well underway as major economies around the globe continue to reopen and recover. With this, transportation companies United Parcel (UPS), FedEx (FDX), Old Dominion (ODFL), and Landstar (LSTR) are expected to benefit from the rising cross-border transportation activities. So, let’s discuss these companies’ prospects in more detail.The transportation industry was severely disrupted by the COVID-19 pandemic, but its recovery is now well underway. With the reopening of major economies worldwide, transportation companies are expected to see rising demand for their cross-border services. Indeed. the global transportation services market is projected to hit $7.8 trillion by 2027, growing at a 3.4% CAGR from 2020. With e-commerce growth expected to continue this year and beyond, and with continued technological advances, the industry is expected to keep growing.
Investors' interest in the transportation industry is evidenced by the First Trust Nasdaq Transportation ETF (FTXR) and the SPDR S&P Transportation ETF’s (XTN) 24.8% and 24.7% returns, respectively, so far this year. This compares to SPDR S&P 500 Trust ETF’s (SPY) 13% gains over this period.
Given the industry’s solid growth prospects along with the recovery of the global economy, we think it is wise to bet on prominent global transportation players United Parcel Service, Inc. (NYSE:UPS), FedEx Corporation (NYSE:FDX), Old Dominion Freight Line, Inc. (NASDAQ:ODFL), and Landstar System , Inc. (LSTR). They are well positioned to capitalize on the industry tailwinds.