The transportation industry is composed of the multiple segments of rail, ocean shipping, trucking/3PL, warehousing & fulfillment, air cargo and passenger air travel, and fleet management.
The global rail industry accounts for $300+ billion in annual revenue- halved across passenger and cargo. Flat growth of rail shipments (including shipments of coal and grain shipments- which are shrinking) means carriers have to focus on operational efficiency for any positive earnings impact: rising employee productivity, fuel-efficient equipment, and improved safety measures.
The global ocean freight market is also flat, impacted by bunker oil prices, dry bulk [containerized and RoRo (roll-on/roll-off) demand, growth of the handysize segment, etc. We expect to see higher levels of consolidation in the global shipping industry due to vessel prices and anemic profitability and freight rates.
Trucking is localized to a greater extent than air and ocean transportation. In the US alone, trucking is estimated at $300 billion- $200 billion for trucking; $70 billion for couriers/messengers; $30 billion in warehousing.
Global revenue in air cargo is estimated at $75 billion this year. However, the industry suffered a huge dip during the recession and deteriorated somewhat following a recovery in 2010 which led to declines in traffic in 2011 and 2012. Boeing believes air cargo traffic will be on the rise over the next 20 years in spite of current market sluggishness and global economic uncertainty. Shippers of perishables and high-value commodities will continue to choose air over ocean.
Passenger traffic by air is up. According to the International Civil Aviation Organization, global air passenger traffic has increased 5% since 2011 to nearly 3 billion passengers; the organization believes traffic will hit 6 billion passengers by 2030. Increasing demand for seats along with the need to lightweight airframes to reduce fuel costs is driving new orders for aircraft.
At $9 billion in estimated revenue, fleet management is a small but growing segment of the transportation industry - and is capturing the attention of both public and private sector fleet owners. Growth of this segment can be attributed to agency/company pressure to offload employees, improved vehicle technology (diagnostics/maintenance/safety solutions), improved fleet management technology (tracking, dispatch, etc.), pressure to reduce costs and improve rider/customer satisfaction, and greater vendor focus on specialist segments (shuttles/delivery/service, trailer tracking, heavy equipment).
Geo Strategy Partner focuses on understanding the challenges facing companies in this space and helping clients analyze market opportunities, develop new service offerings, and grow through mergers and acquisitions.
|Cargo transportation||Fleet management|
|Fulfillment/pick & pack||Passenger transportation|
|Small package delivery||Third party logistics|
|Car and vehicle rental||Distributors|
|Fleet management companies||Logistics software developers|
Market opportunity study for intelligent transport system software including dispatching, routing, etc. for taxis and limousines for a foreign software developer- US
Study of the use of dog security and detection teams for security and detection services at rail yards, heliports, airports, ports, etc.- US
Air route development in the Caribbean
|American Steamship Company||AMR Corp.||CH Robinson Worldwide|
|CSX||Delta Airlines||Expeditors International of Washington|
|FedEx Trade Networks||Heil||JB Hunt|
|Jet Blue||LeasePlan||National Railroad Passenger Corporation (Amtrak)|
|Schneider National||Swift Transportation||UPS Supply Chain Solutions|
|US Air||UTi Worldwide|
We attribute our success in the transportation segment to our database of contacts and our understanding of logistics and supply chain imperatives. To learn how Geo Strategy Partners can help you in this sector, contact us.