Transportation

Nearly every company, business, government and consumer in the world is, to some degree, dependent on the transportation industry. As such, the shipping of supplies, products and consumer goods is essential to the domestic and international economic system. Since 1998 the transportation industry has accounted for 3% of the U.S. GDP each year.^[1]

The transportation industry can be broken down into three major groups of companies: Shipping, passenger transport, and equipment manufacturers. In some cases, particularly within shipping and passenger transport, companies provide services in multiple areas of the industry. Shipping companies are responsible for the transportation of supplies, and products to businesses, governments and individual consumers and operate on a global basis. The passenger transport segment provides people with the means to get anywhere on the planet, whether it is by air, sea or land. Finally, the manufacturing segment produces the trucks, planes, ships and railcars along with all the technology that allow transportation to exist in its current form. These manufacturers are just as essential to the transportation of materials and people as are the companies that transport them.

Shipping

WOW! What a nice surprise I got this moninrg reading through your blog. I'm honored you consider my reading list a worthy one for other traders to emulate

Railroads and Cargo Transportation saiajean

The transportation of supplies and larger scale shipments is generally categorized into freight and cargo shipping. Much of this transport |align=center| $15.8 |- |align=center| Operating Income |align=center| $3.4 |align=center| $0.3 |align=center| $2.1 |align=center| $2.5 |align=center| $3.1 |- |align=center| Net Income |align=center| $1.8 |align=center| $0.1 |align=center| $1.2 |align=center| $1.5 |align=center| $1.7 |- |align=center| Net Debt/OI |align=center| 2.2 |align=center| 5.0 |align=center| 2.5 |align=center| 2.2 |align=center| 2.2 |- |align=center| Dividend Yield |align=center| 1.6% |align=center| 0.0% |align=center| 1.5% |align=center| 2.0% |align=center| 1.2% |- |}

Companies involved in freight and cargo shipping through railroads and trucking include

• Burlington Northern Santa Fe (BNI)
• Conway Inc (CNW)
• C.H. Robinson Worldwide (CHRW)
• CSX (CSX)
• J.B. Hunt Transport Services (JBHT)
• Norfolk Southern (NSC)
• Union Pacific (UNP)

saiajean

A portion of the freight and cargo volume that is shipped around the globe travels through the air, but the large majority of international freight and cargo shipments are sent by sea. Many companies own their own fleet of vessels that are used to ship goods, however some operate as logistics managers and delegate the actual shipping portion of the business to third parties that own and operate shipping vessels. Companies whose operations involve shipping and transportation by sea include

• C.H. Robinson Worldwide (CHRW)
• Diana Shipping (DSX)
• DryShips (DRYS)
• Expeditors International of Washington (EXPD)
• Overseas Shipholding Group (OSG)
• Teekay Shipping (TK)
• UTi Worldwide (UTIW)

A really good answer, full of ratinolatiy!

Passenger Transport

Aviation

The airline industry is arguably the most important transportation sector in the world. In 2007 roughly 679 million passengers used air transportation in the U.S. alone.^[1] Over the first half of 2007 the major airline companies collectively brought in $59.45 billion in revenues.^[2] Airlines generally earn the majority of their revenue from passengers, but often also carry out shipping and transportation operations as well. Major airline companies include

• American Airlines (AMR)
• Continental Airlines (CAL)
• China Southern Airlines Company (ZNH)
• Delta Air Lines Inc. (DAL)
• JetBlue Airways (JBLU)
• Northwest Airlines (NWA)
• Southwest Airlines Company (LUV)
• United Airlines (UAUA)
• US Airways Group (LCC)

Airlines are very susceptible to fuel prices as these costs are almost always the most significant of their operating expenses. The major airlines all have hedging strategies that allow them to lock in fuel prices years in advance to reduce some of the risk involved in the price of oil. The table below gives a comparison of operating metrics for today's major airline companies.

Automobiles

The United States is the world's largest producer and consumer of automobiles. In 2007 new-car and light truck sales in the United States exceeded $675 billion in revenues with roughly 15.9 million cars and light trucks sold.^[3] In recent years China has become the world's largest importer of petroleum products. This has largely been a product of increased automobile demand in the China, which is expected to grow significantly over the next forty years. Some predict that cheaper labor and increased product quality could allow China to steal a major portion of the automobile production industry market share from today's major producers.^[3] This trend could be a serious threat to well established companies in the industry (especially the American big 3 producers) who have recently experienced periods of lower performance. Today's major auto producers include

• DAIMLERCHRYSLER AG (DAI)(U.S.)
• General Motors (GM)(U.S.)
• Harley-Davidson (HOG)(U.S.)
• Honda Motor Company (HMC)(Japan)
• Ford Motor Company (F)(U.S.)
• Nissan Motor (NSANY)(Japan)
• Toyota Motor (TM)(Japan)
• Volkswagen (VLKAY)(Germany)

*Sold Chrystler group in 2007.

Beyond the major automobile producers there is a smaller group of companies that provide services directly related to the industry. These companies include car rental services, bus transit companies, and retail sellers, such as:

• Avis Budget Group (CAR)
• AutoNation (AN)
• CARMAX (KMX)
• Hertz Global Holdings (HTZ)
• Firstgroup PLC (LON:FGP)

Transportation Equipment Manufacturing

The transportation industry relies on the industrial equipment that companies use to transport products around the world. As a result, companies that manufacture and distribute transportation equipment are directly correlated with the industry and its performance. Manufacturers of transportation equipment produce everything from railroad cars, automobiles and planes to ships and heavy machinery.

Shipping Equipment Manufacturers

Companies that manufacture and distribute automobile parts and technologies include

• Advance Auto Parts (AAP)
• Goodyear Tire & Rubber Company (GT)
• O'Reilly Automotive (ORLY)
• Delphi Corporation (DPHIQ)
• Dana Corporation (DCNAQ)

Companies that manufacture products for railroad shipping include

• Trinity Industries (TRN)

Companies that manufacture airplanes and parts include

• Boeing Company (BA)
• EADS NV (EADSY)
• General Dynamics (GD)
• Lockheed Martin (LMT)

References

1. ↑ ^{1.0 1.1} www.bts.gov, retrieved March 24, 2008.
2. ↑ ^{2.0 2.1} Airline Data Project, retrieved March 24, 2008.
3. ↑ ^{3.0 3.1} Automobiles and Trucks Research, Plunkett Research, Ltd.