Transportation Services Sector

Transportation Services Sector

Brief Excerpt from Industry Overview Chapter:

Companies in this industry are primarily engaged in providing transportation services, including air transportation of passengers and freight; support activities to transportation; mail services under a universal service obligation; and air, surface, or combined mode courier and express deliver services of parcels not operating under a universal service obligation. Major companies include Union Pacific, United Airlines, UPS, US Postal Service, and YRC Freight (all based in the US), as well as AP Moller Maersk (Denmark), Deutsche Post and Lufthansa (both based in Germany), and East Japan Railway and NYK Line (both based in Japan).

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% of industry revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services by transportation service companies include the transportation of boxed, palletized, and other packages at about 15% of the industry's revenue and domestic, schedules passenger transportations accounting for about 10%. Other services include transportation services for small packages, documents, and letters and freight transportation arrangement (both at...