Thematic hub | Industrial | Logistics

What are logistics stocks?

Logistics stocks include companies that transport goods, manage supply chains, and provide warehousing services for global commerce. These businesses operate within the broader industrial sector, as they provide critical infrastructure services that enable trade and economic activity across all other industrial sectors.

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The logistics sector includes rail freight, trucking companies, shipping lines, air cargo carriers, package delivery services, and integrated logistics providers that combine multiple transportation modes with warehousing and distribution services. Each of these businesses has subtly different investment characteristics and faces unique pressures. Logistics and transportation are enormous business areas requiring significant physical infrastructure, and operate in a tightly regulated environment, subject to national and international law and under pressure from organised labour unions.

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Investing in logistics stocks

Logistics stocks provide investors with direct exposure to economic growth and trade expansion, as increased commercial activity necessarily requires more transportation and distribution services. These companies often demonstrate predictable revenue patterns based on shipping volumes and established customer relationships, particularly in segments like railroad transportation where switching costs are high and service agreements span multiple years. The essential nature of logistics services creates relatively stable demand even during economic slowdowns, though volumes and pricing can fluctuate significantly based on broader economic conditions and seasonal patterns such as holiday shipping periods. Linked to the overall growth of the economy, but not as cyclical as other industrial sectors or materials stocks, shipping stocks follow their own independent cycle of under- and oversupply, making an in-depth knowledge of the business essential for would-be investors.

Sector Highlights

Global market size: 2024 estimates put the size of the global logistics market at $10 trillion, but this estimate must be viewed carefully, since the market include tech giants such as Amazon and retail businesses like Walmart, due to the size and importance of their own logistics and distribution businesses. Defined more narrowly, freight forwarding is worth $220 billion, and dedicated US freight and logistics stocks have a market capitalisation of $200 billion
Top stocks: UPS, Union Pacific, FedEx
Important themes: Tariffs, onshoring, sustainability.

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Freight and shipping profits depend on oil prices. Discover more about oil trading and other commodities here

Important logistics stocks

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Market trends impacting logistics stocks

Tariffs, onshoring, and reshoring

The announcement of both blanket and targeted tariffs by US President Donald Trump in 2025 had an enormous and ongoing impact on the logistics industry. But already long before this announcement, onshoring had appeared as an emerging theme within the logistics sector and for industrial stocks more generally. Onshoring, and the closely related phenomenon of reshoring, see industrial production moved closer to the end user, halting or reversing the multidecade trend of globalised production. As goods and components for goods travel shorter distances, demand for some logistics services reduces, but any change to existing supply networks creates business for the sector as producers try and source goods and secure new supply chains. This trend is felt most severely for shipping companies specialised in large, containerised sea freight and air freight solutions.

Local delivery, including managing e-commerce and other industries reliant on high volumes of small packages, is largely unaffected by industry reshoring, and this part of the market is experiencing sustained growth from consumer-to-consumer (C2C) marketplaces and online platforms. To stay ahead of the competition, logistics companies need to provide an end-to-end service, rather than simply competing on shipping rates or managing an isolated part of the overall distribution process.

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FAQs

What are logistics stocks and which types of logistics companies are there?

Logistics stocks encompass companies that transport goods, manage supply chains, and provide warehousing services essential to global commerce, operating within the broader industrial sector. The sector includes diverse business models: railroad stocks like Union Pacific offer stable, long-term revenue streams with high switching costs and multi-year service agreements; delivery stocks such as UPS and FedEx benefit from e-commerce growth and consumer-to-consumer marketplace expansion; whilst shipping companies specialising in containerised freight provide exposure to international trade flows. Freight forwarders form another key segment, offering integrated logistics solutions that combine multiple transportation modes with warehousing and distribution services.

How do shipping companies and freight forwarders differ in their business models and investment characteristics?

Shipping companies and freight forwarders operate distinct business models within the logistics ecosystem, each offering different investment propositions. Shipping companies typically own physical assets such as vessels, containers, and port facilities, focusing on moving cargo across specific routes and bearing direct exposure to fuel costs, capacity utilisation, and freight rate fluctuations. These firms often experience significant cyclicality based on global trade volumes and can generate substantial returns during peak demand periods. Freight forwarders, conversely, operate asset-light business models, acting as intermediaries who coordinate shipments across multiple carriers and transportation modes without owning the physical infrastructure. This approach provides more stable margins, and freight forwarders typically demonstrate less volatility, whereas shipping companies offer greater upside potential during favourable market cycles.

What impact are tariffs having on railroad stocks and containerised shipping investments?

Railroad stocks and containerised shipping are both influenced by the ongoing Trump tariffs, which have intensified the shift towards onshoring and reshoring of industrial production. Long-distance air and sea freight have experienced the most severe pressure as goods and components travel shorter distances, reducing demand for long-distance sea freight solutions. Railroad stocks, however, so far have demonstrated greater resilience. Onshoring trends actually benefit domestic railroad operators as manufacturers relocate production closer to end users within national markets. Additionally, any significant changes to existing supply networks create new business opportunities as producers seek alternative sourcing arrangements and establish fresh supply chains. Local delivery and trucking stocks remain largely unaffected by reshoring trends and continue experiencing sustained growth from e-commerce expansion, highlighting the importance of companies that provide comprehensive logistics solutions rather than isolated transportation service.