What Companies are in the Transportation Field?
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Summary:
Companies in the transportation field are companies that primarily focus on moving goods or people to different points. In the world of supply chain logistics, companies can be involved in transportation via air, land, sea, and now even space. Some of the largest and most successful companies listed on the Dow Jones and S&P are companies involved in the transportation field.
Companies involved in the transportation field make money off of transporting either goods or people from one point to another. If you ordered a good from another state or country or traveled by boat or plane to a far-off destination, you probably utilized a company that was involved in this field.
The primary modes of transport are land, sea, or air, with space representing the next logical progression. Investing in the transportation industries field requires a good understanding of the companies involved, as well as the existential threats that might exist to the transportation industry, such as fluctuating oil prices. The Down Jones Transportation Average gives a market snapshot into the overall performance of the industry, as well as companies that have strong growth or upside potential.
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Transportation field 101
Companies whose primary objective is to facilitate the transportation of a good or person from Point A to Point B are involved in the transpiration field. Some companies offering transportation services might be name-brand airlines that you’re familiar with, and some might be obscure shipping companies that you may never have heard of.
Currently, there are three modes of transportation that a company can be involved in: land, air, and sea. Space will be the next frontier of transportation for both goods as well as human beings.
Land transportation
Whether it be a bus full of people, a truck full of goods, or a train car full of hay bales, companies involved in the transportation of people or items over land will profit from the activity. Most transportation over land is by train with a railroad track or by vehicle with a road. Here are some examples.
Car rental companies
As cars are the primary method of transportation in the U.S., companies involved in the car rental industry are large parts of the industry. The companies make money off renting out a selection of their fleet of vehicles to those that need a ride.
- Enterprise Holdings. Enterprise Holdings owns Enterprise, but also National and Alamo as well. With about 9,500 branches, the car rental giant took in $22.5 in revenue during 2020.
- The Hertz Corporation. With about 12,000 locations as of 2022, the Hertz Corporation is a huge part of the car rental sector. The company owns Hertz Rent-a-Car, in addition to the Thrifty and Dollar car rental brands, resulting in a 2020 revenue of around $5.28 billion.
- Avis-Budget Group. Owner of Avis, Zipcar, and Budget Rent a Cars, Avis Budget Group is a familiar name to many. With about 11,000 across the U.S., the company collected about $9.17 billion in revenue during 2019.
Ride-share companies
Since the formation of Uber in 2009, ride-hailing and ride-share companies have become huge players in the transportation industry. Not only do they transport people around cities and suburbs, but they are also involved in delivering goods like groceries.
- Uber. The original ride-share developer, Uber is the largest ride-share company in the world by volume. It is also present in 80 countries around the globe and provides swift transportation for those looking to get around in urban areas. Uber also invested in the electric scooter company Lime in 2017, allowing app users to locate electric scooters around popular cities as an alternative for ride-sharing. As of 2021, the ride-share giant’s revenue was estimated at $17.44 billion.
- Lyft. Formed in 2012, Lyft is the second most popular ride-sharing application in the United States besides Uber. Following in Uber’s footsteps, Lyft also started promoting electric scooters to commuters in 2018, which users could locate on the Lyft app. In 2021, Lyft brought in roughly $3.2 billion.
- Didi. Didi is China’s largest ride-sharing company and is currently the second-largest in the world by usage offering ride-share transport services. Uber originally was in the China market, but regulations forced them to sell their China business to the local competitor. As of 2020, Didi claimed revenue of $21.63 billion.
Shipping and delivery
Suppose you send a package to your best friend living in Alaska or receive packages of goods you have ordered from the internet. In that case, you would use a shipping or delivery company that has its hands in the transportation field.
Although goods will also travel by sea and air on their way to you, every shipped package travels for some time on the road through trucking companies. The most well-known companies are FedEx and UPS.
- FedEx. FedEx, with its headquarters in Memphis, Tennessee, is one of the most famous shipping companies in the world. They also provide a great freight forwarding service. There is a FedEx location in most of the major cities in the world. As of 2021, FedEx’s revenue was $83.95 billion.
- UPS. UPS is one of the oldest shipping and transportation companies in the United States, with a founding date of 1907. It is now a Fortune 500 company and is considered a blue-chip transportation stock. UPS is currently the largest company in the world involved in the transportation industry with a revenue of $84.6 billion as of 2020.
Water transportation
Companies that are involved in the transportation of goods over bodies of water are also considered to be in the transportation field. The two primary types of companies involved in water transportation are travel (cruises) and shipping.
Cruises
Cruises are a popular way to see multiple destinations in one trip while enjoying a great lifestyle on board the cruise ship. They will typically take off from one destination on a round trip package while visiting various ports.
- Carnival Corporation. Carnival Corporation, headquartered in Miami, Florida, is the largest cruise company in the world. Originally founded as Carnival Cruise Line in the 1970s, it has since grown to service locations all around the world. As of 2021, the cruise giant posted revenues of $1.908 billion.
- Royal Caribbean. Royal Caribbean is the world’s second-largest cruise company after Carnival. Although primarily focusing on the Caribbean and Latin America, Royal Caribbean travels all around the world. In 2021, Royal Caribbean collected $1.53 billion in revenue.
Pro Tip
The cruise industry is greatly affected by people’s disposable income. As cruises are not considered essential, the industry really rises and falls with the state of the economy, and future economic sentiment. Investing in the cruise industry at the right time is important.
Shipping and logistics
Most global trade involves a substantial amount of products being sent all around the world on container ships. This stands as the cheapest and most efficient way of shipping large amounts of goods all over the world.
These companies offer several logistics solutions in the logistics sector. Here are some of the top companies that offer supply chain management solutions for shipping by sea.
- Maersk. Maersk is a Danish shipping conglomerate founded in 1904 that is currently the largest shipping company in the world. They have operations in 36 countries and currently employ around 36,000 people. Considering the size of Maersk, there’s a good chance an order produced in a foreign country rode on a Maersk ship at one point in time, resulting in roughly $62 billion in revenue for 2021.
- Mediterranean Shipping Company (MSC). The Mediterranean Shipping Company is headquartered in Geneva, Switzerland. It is currently the second largest shipping company in the world, directly behind Maersk. According to an article in the financial times, it is poised to overtake Maersk for the top spot sometime in the future. In 2020, MSC collected about $28.2 billion in revenue.
Looking for a good company to invest in that will be transporting things in the future. Here is a list of advisors we trust.
Air transportation
Most goods that you purchase will travel by air or sea. However, air transportation is a very common way to transport human beings from one point to another point on planet earth. Here are a few companies in the air transport industry that you might have heard of.
- Delta Airlines. Delta Airlines is the largest airliner in the world when looking at market cap. Headquartered in Atlanta, Georgia, Delta operates around 5,400 flights daily. Their flights make their way to 325 destinations on six different continents, resulting in $29.9 billion in revenue for 2021.
- American Airlines. The second-largest airline in the world by market cap, American Airlines flies to destinations scattered across the globe. They serve 230 domestic destinations and 122 destinations outside of the United States. In 2020, the airline pulled in roughly $17.34 billion in revenue.
Space transportation
Most of the goods and people being transported will take a route consisting of air, land, and sea. Space is the final frontier of travel and transportation.
Previously, this mode of transportation was dominated exclusively by governments, such as the U.S. government’s NASA program. However, as of 2022, private companies have also started exploring transportation possibilities through space.
Space X
Space X is the premier company involved in the “space” transportation field. Their rockets have transported satellites into space for both governments and private companies. In 2012, the company successfully used its aircraft to transport supplies to astronauts on the International Space Station (ISS). And in 2020, another Space X craft transported additional astronauts to the ISS, marking an impressive achievement for the private company.
The ultimate goal for Space X is to also transport people to different planets sooner rather than later. As of 2022, Mars is still listed as the company’s first destination. In 2021, the company collected roughly $1.6 billion in revenue, further acknowledging Space X as a prominent player in space travel and transportation.
How to invest in the transportation field
As transportation of goods and services is currently essential to both business and pleasure, investing in the transportation sector might be a good idea. One can invest directly in a transportation company or invest in something that will be affected by the transportation industry, such as transportation infrastructure.
The Dow Jones Transportation Average (DJTA) is an index fund composed of 20 high-performing companies in the transportation industry. Though the index has seen a one-year return of -5.76%, the chart below reveals regular dips and rises in revenue through several years.
If you’re searching for a company that seeks maximum profits or looking for an opportunity to invest in which a company prioritizes employee growth, consult with a brokerage to learn whether the DJTA index fund is a good choice for your portfolio.
FAQs
What are four examples of businesses in the transportation sector?
Ground transportation companies include Uber, Enterprise, and Didi, while air transportation companies include airlines like Delta and American Airlines. Water transportation companies may transport goods, such as Maersk, or people on vacations, like Carnival Cruises.
What is a transportation company?
A transportation company is a company whose primary business is transporting goods and/or people from one point to another.
What is the biggest transportation company?
As of 2022, UPS is the largest transportation company in the world.
Key Takeaways
- Companies involved in the transportation industry are companies involved in the transportation of goods or people from one point to another.
- Traditionally, companies involved in transportation travel by land, air, and sea. Space is the new frontier of the transportation industry.
- Uber, Maersk, Delta Airlines, and Space X are all examples of companies in the transportation industry.
- Investing directly in companies through public markets, or investing in transportation infrastructure, are great ways to invest in the industry.
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