Think cheap oil, less traffic, and way less people travelling and using plans. That’s the situation now and has been during the COVID-19 pandemic. This is a great recipe for Integrated Freight & Logistics companies to flourish.
With less people travelling, the need to ship things via shipping companies is increasing. Few days ago I went to the UPS store to ship something and was shocked to the long line and the long wait at the store. I actually left and came back at another time thinking the line would be less, but I was shocked one more time and ended up waiting inline for a good 45 mins before I was able to get my turn. This made me thinking, maybe because people are not travelling they are shipping more to their relatives and for business.
This is a good sign for shipping companies such as United Parcel Service, Inc [stock_quote symbol=”UPS”] and FedEx Corporation [stock_quote symbol=”FDX”]. combined with cheap oil for transportation and less traffic on the roads this can make a winning combination for these companies to increase their revenues and earnings.
Cheap oil should allow these shipping companies to save on transportation cost which should increase earnings, and increased demand for shipping should boost revenues.
This sector might be yet another bright spot during the COVID-19 pandemic economy.