With a few clicks, a shiny object made thousands of miles away can come hurtling to your door at breakneck speed. That’s thanks to logistics companies, which are helping to turn our planet into a “global village”.
Many investors are excited by this £6.3 trillion industry. They hope the rest of this decade will bring rapid growth for companies that make online shopping and international trade possible, as millions more people in developing countries get internet connection and improved transport infrastructure.
Logistics involves everything from shipping to warehousing and door-to-door delivery. This complexity creates lots of space for competition. As an introduction to some of the biggest players, we’ve chosen the top 10 components of the S&P Transportation Select Industry Index.
This index is made up by stocks in the GICS Air Freight & Logistics, Airport Services, Cargo Ground Transportation, Rail Transportation, Highways & Rail Tracks, Marine Transportation, Passenger Airlines and Passenger Ground Transportation sub-industries.
| Logistics stock | Icon | 1 year performance (Feb. ’24) | 5 year performance (Feb. ’24) | Link to invest |
|---|---|---|---|---|
| SkyWest (SKYW) |  | 212.35% | 7.20% | Invest with XTBCapital at risk |
| XPO (XPO) |  | 211.95% | 557.24% | Invest with XTBCapital at risk |
| Uber (UBER) |  | 99.53% | 72.26% | Invest with XTBCapital at risk |
| Matson (MATX) |  | 74.18% | 50.50% | Invest with XTBCapital at risk |
| ArcBest (ARCB) |  | 37.26% | 260.15% | Invest with XTBCapital at risk |
| Ryder System (R) |  | 21.19% | 81.20% | Invest with XTBCapital at risk |
| CSX (CSX) |  | 19.08% | 53.31% | Invest with XTBCapital at risk |
| Norfolk Southern (NSC) |  | 6.31% | 38.92% | Invest with XTBCapital at risk |
| RXO (RXO) |  | -1.14% | -3.49% | Invest with XTBCapital at risk |
| Lyft (LYFT) |  | -21.21% | -83.68% | Invest with XTBCapital at risk |
Logistics stocks are shares in companies that specialise in transporting and warehousing goods. Moving items from one place to another involves plenty of efficient planning from freight and delivery firms.
It’s because of logistics companies that we can savour exotic fruits and out-of-season vegetables while using our Chinese-manufactured smartphones and relaxing on furniture crafted from Norwegian pine.
Nowadays, logistics companies are increasingly stepping up their game to bring products from the other side of the world right to our doorstep, with the High Street middleman getting cut out of the picture.
Compare share dealing accounts to find the right platform for you. Make sure to use a platform with access to international markets or a large exchange-traded fund (ETF) selection if you want to invest in top logistics stocks from around the world.
Adding logistics stocks to your portfolio could make sense if you’re excited about one or more of these big trends:
Investing in logistics stocks essentially means backing the world’s constant and growing demand for moving goods around.
But remember, while clicking ”buy now” on your latest online purchase is a breeze, investing in logistics stocks requires a lot more thought. Scroll down to uncover the risks of putting your hard-earned money in logistics stocks.
Before you fill your shopping basket with the best (or worst) logistics stocks, it’s important to be aware of what could go wrong. Here are just some of the things that keep investors in logistics stocks awake at night.
When investing in logistics stocks, you’re navigating a complex and interconnected space. It’s vital to research these risks before diving in.
"If you want to cash in on the logistics boom that’s been ignited by e-commerce, there are a few options. One is to invest directly in e-commerce stocks, which includes the likes of Amazon (AMZN), Shopify (SHOP), Etsy (ETSY). However, these investments expose you to more than just logistics.
Another tactic is to use an ETF like the L&G Ecommerce Logistics UCITS ETF, for example. This is an ETF that tracks the performance of the Solactive Ecommerce Logistics Index. This index tracks global stocks that are involved with the warehousing or fulfilment and delivery of goods and software solutions companies that provide e-commerce logistic services."
If leafing through shipping companies’ annual reports sounds like a quick route to a headache, picking individual stocks might not be for you. But don’t worry, there are other ways to invest in the space:
Picking individual stocks can be lucrative if you get it right, but disastrous if you choose a duffer. While ETFs and investment trusts are also risky, with these options you get the benefit of diversification. In theory, this should make your portfolio sturdier and less likely to suffer sudden and severe drawdowns.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Logistics companies are like the circulatory system of the global economy. Their role is to move goods from point A to B, like blood vessels carrying oxygen around the body. But logistics companies are also sensitive to the health of the global market. Economic shifts in supply chains and technological advancements can either strengthen or strain this system. Also, tariffs and regulations can impact the flow, much like a blood clot that blocks arteries.
So, as you consider investing in logistics stocks, remember their essential yet delicate role. Keeping your finger on the pulse of global trade flows isn’t easy. You might want to outsource the job of picking stocks to a fund manager or simply invest in an ETF that tracks an index of key logistics stocks.
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