When we think about the best freight and logistics stocks, the first names that come to mind are FedEx, UPS, and DHL. While these are the giants of the logistics industry, there are some interesting companies like XPO Logistics that offer less-than-truckload services, freight forwarding, freight brokerage, and other logistics services.
XPO Logistics is up 5.07% for the year 2020 and up 107% since the March market crash. Compare that with the S&P500, which is up 4.28% year-to-date and up 51% since hitting a low in March 2020. FedEx, meanwhile, is up 35% since the start of 2020 and up 132% since the March market fall. UPS is up 36% since the beginning of 2020 and up 80% since hitting a low in March 2020. Lastly, DHL is up 11.58% since January 2nd, 2020, and up 100% since the March crash. So, performance-wise, XPO Logistics is definitely among the top transportation stocks to buy.
The near-term prospects of the logistics and transport sectors seem closely linked to the economic rebound of the global economy from the COVID-19 pandemic. Transport companies are in the business of getting people and their things from one place to another. The sector was hit badly by the outbreak of the pandemic.
Anyone looking to buy transportation stocks has a variety of sub-sectors to consider. There are railroads, airlines, marine shipping companies, logistics companies, and trucking companies. The logistics companies are the ones that work out the best mode of transportation (or a combination of modes) to get shipments from one location to another in the most efficient manner.
XPO is a top 10 global provider of supply chain and logistics solutions. It has over 50,000 customers spread across 30 countries. The growth in e-commerce is a major driver for the long-term growth of XPO. The company has increasingly invested in technology to differentiate itself in a sector that has a reputation for being too manual and inefficient.