3 logistics companies worth paying attention to in the face of the e-commerce boom

With changing consumer preferences, rapid adoption of advanced technologies such as artificial intelligence, IoT and cloud computing, and a boom in e-commerce, the logistics market has witnessed strong expansion.

In this context, it would be wise to track the stocks of logistics companies such as FedEx Corporation (FDX), Universal Logistics Holdings, Inc. (Hives) and Radiant Logistics, Inc. (RLGT) in light of the e-commerce boom.

The global logistics market is recovering strongly from the effects of the Covid-19 pandemic. Last year the global logistics industry has reached market size almost $9.41 trillion. The market value is expected to exceed $14.08 trillion by 2028, which will increase the scale of the logistics industry.

Additionally, with easier access to the Internet, convenience and changing consumer preferences, the e-commerce market is developing dynamically. Number of users in E-commerce market in the USA is growing year by year and is expected to grow steadily from 2024 to 2029, reaching a total of 60 million users, an increase of 21.9%.

E-commerce logistics is one of the fastest-growing industries in the country, surpassing the staggering $1 trillion mark for the first time in 2022. The market continues to grow with rapid technological advancements in logistics integration through automation. The U.S. e-commerce logistics market is projected to reach $198.39 billion by 2029, growing at a rate CAGR of 8.9%.

In addition, new and advanced technologies, including robotic process automation (RPA), cloud computing and artificial intelligence (AI), are replacing weak links and changing the supply chain software market, leading to rapidly changing supply chain trends. At this point, trends such as supply chain as a service (SCaaS), Blockchain and Cloud SCM solutions are likely to dominate.

With these encouraging trends in mind, let’s take a closer look at the basics of the top Airfreight and shipping services shares, starting from number 3.

Stock #3: FedEx Corporation (FDX)

FDX provides transportation, e-commerce and business services internationally. The company operates through FedEx Express; FedEx shipping; FedEx shipping; and FedEx service segments. It offers express transportation, small package ground delivery, freight services and time-sensitive transportation services.

On September 18, FDX launched fdx.com, available to FedEx customers in the United States. It is a data-driven commerce platform with advanced FedEx network analytics that connects the entire customer journey. The platform will help FDX customers increase demand, increase conversions, optimize order fulfillment and streamline returns.

On September 5, FDX announced a strategic alliance and investment with Nimble, an AI robotics and autonomous e-commerce fulfillment technology company, to scale FedEx Fulfillment based on its fully autonomous 3PL model. The strategic investment in Nimble will expand FDX’s e-commerce footprint and expand FedEx Fulfillment offerings in North America.

For the fiscal first quarter ending August 31, 2024, FDX reported total revenues of $21.58 billion and adjusted operating income of $1.21 billion. Business net income and EPS were $892 million and $3.60 for the quarter, respectively.

Additionally, as of August 31, 2024, cash and cash equivalents and total assets were $5.94 billion and $86.71 billion, respectively.

Analysts expect FDX’s revenue for the second quarter (ended November 2024) to increase slightly year-over-year to $22.17 billion, and EPS for the same quarter is expected to increase 1.6% year-over-year to 4 .05 dollars.

FDX shares are up 5.8% over the past nine months, closing at $266.93 in the most recent trading session.

FDX POWR Ratings reflect his worldview. FDX is rated B for quality. He ranks fourth out of 16 Airfreight and shipping services industry shares. POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted optimally.

In addition to the POWR Ratings we’ve provided above, we also have other FDX Ratings for Sentiment, Growth, Momentum, Stability, and Value. Get all FDX ratings Here.

Stock #2: Universal Logistics Holdings, Inc. (Hives)

ULH offers transport and logistics solutions internationally. The company provides truck transport services, domestic and international forwarding, and customs brokerage services.

On September 30, ULH announced the acquisition of Parsec, LLC, Parsec Intermodal of Canada ULC and OB Leasing, LLC, a market-leading provider of terminal management services for Class I, regional and short line railroads in North America for a total cash purchase price under transaction amounted to USD 193.6 million.

For the fiscal second quarter ended June 29, 2024, ULH’s total operating revenue increased 12% year-over-year to $462.16 million. Its EBITDA increased by 51.9% compared to the year-ago value to USD 84.81 million. The company’s net income was $30.73 million and $1.17 per share, up 30.4% and 30%, respectively, from the prior-year quarter.

Street expects ULH’s third-quarter (ended September 2024) revenue to increase 10.1% year-over-year to $463.70 million. EPS for the same quarter is expected to increase 34.1% year over year to $1.18. Additionally, the company has topped consensus revenue estimates in all four consecutive quarters, which is impressive.

Over the past nine months, the company’s stock has gained 46.3%, closing at $41.71 in the most recent session.

ULH’s POWR Ratings reflect its solid fundamentals. It has a B rating for Value, Momentum, Growth, Stability and Sentiment. It ranks third in the air transport and forwarding services industry.

In addition to what was stated above, we also rated ULH for quality. Get all your ULH ratings Here.

Stock #1: Radiant Logistics, Inc. (RLGT)

RLGT provides technology-enabled, value-added global transportation and logistics solutions. It offers domestic and international air and sea forwarding services as well as road transport brokerage services, including truck transport and intermodal transport services. In addition, the company also provides logistics and supply chain services.

On October 2, RLGT announced the acquisition of Focus Logistics, Inc., a privately held, Michigan-based company with operations in Romulus, Michigan, which has operated under the Service By Air brand since 2006. With this acquisition, RLGT continues to deliver and ensure success for its customers and employees.

For the fiscal fourth quarter ended June 30, 2024, RLGT’s revenue was $802.47 million. Adjusted gross profit was $236.52 million. Net income attributable to RLGT and adjusted EBITDA were $23.35 million and $28.68 million, respectively.

Analysts expect RLGT’s revenue for the quarter ending September 2024 to increase 2% year-over-year to $215.03 million. Moreover, the company’s revenue for the quarter ending December 2024 is expected to increase 6.8% year-over-year to $214.84 million.

Over the past six months, the company’s stock has gained 18.8%, closing at $6.31 in the most recent session.

RLGT’s positive outlook is reflected in POWR’s ratings. It has an overall rating of B, which equates to Buy in our proprietary rating system.

It has B grades on sentiment, value and growth. It was at the top of 14 companies in the air transport and forwarding services industry.

To see the dynamics, stability and quality ratings of RLGT, click here.

What’s next?

43-year investing veteran Steve Reitmeister just released his 2024 market forecasts along with his trading plan and 11 top picks for the coming year.

Stock market outlook for 2024 >

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On Thursday afternoon, FDX stock was trading at $263.47 per share, down $3.46 (-1.30%). Year-to-date, the FDX Index has gained 5.77% compared to the benchmark S&P 500 Index’s gain of 20.36% over the same period.

About the author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More…

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