11 Best Logistics Stocks to Buy

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In this article, we discuss the 11 best logistics stocks to buy now. If you want to skip our detailed discussion on the logistics industry, you can go directly to the 5 Best Logistics Stocks to Buy.

According to Precedence Research, the size of the logistics industry stood at $10.68 trillion at the end of 2022. The industry is set to experience a compound annual growth rate (CAGR) of 5.48% to reach a size of $18.23 trillion by 2032. Meanwhile, London, UK-based professional services firm PricewaterhouseCoopers (PwC) estimates that the logistics industry generates an estimated annual revenue of $4.6 trillion. Presently, the North American region dominates the logistics industry. The logistics industry can be broadly categorized into three notable groups based on their business models. A first-party logistics (1PL) provider is a basic form of logistics management where a company or organization handles its own logistics operations internally. A second-party logistics (2PL) provider comes into play when a company engages in a direct logistics partnership with another company. Meanwhile, a third-party logistics (3PL) provider is a dedicated entity that handles the transportation, inventory management, warehousing, and other services for any company.

One of the main drivers in the growth of the global logistics industry is the boom in the e-commerce industry. According to the United Nations Conference on Trade and Development (UNCTAD), the COVID-19 pandemic has increased the contribution of e-commerce sales as part of total retail sales from 16% to 19% in 2020. Leading e-commerce companies like Alibaba Group Holding Limited (NYSE:BABA), Amazon.com, Inc. (NASDAQ:AMZN), JD.com, Inc. (NASDAQ:JD), and PDD Holdings Inc. (NASDAQ:PDD) experienced their top-line increase by 70% between 2019 and 2021 and the total share of these prominent e-commerce platforms as a percentage of total global e-commerce sales increased from 75% in 2019 to 80% in 2021.  Such dynamic growth in the e-commerce industry has resulted in some of the biggest global logistics and shipping companies expanding their operations and investing heavily in artificial intelligence (AI), automated warehouses, the Internet of Things (IoT), predictive analysis, and real-time tracking.

The logistics industry is anticipated to experience tailwinds as road connectivity in developing countries is now improving. This improvement in road connectivity is expected to offer greater upside potential to the best transportation stocks, such as CSX Corporation (NASDAQ:CSX), FedEx Corporation (NYSE:FDX), and Union Pacific Corporation (NYSE:UNP). One notable measure intended to give a boost to the industry is the Belt and Road Initiative (BRI), also known as the New Silk Road, launched by China in 2013. The initiative includes a wide network of highways and railroads expanding into former Soviet countries in the West. Meanwhile, in the South, China intends to expand this network through its neighboring countries, Pakistan and India. China has been able to reach agreements with 147 countries of the world that are responsible for contributing two-thirds of the global gross domestic product (GDP). The biggest component of the BRI is the China-Pakistan Economic Corridor (CPEC), with an estimated cost of $62 billion. To date, China has spent over $1 trillion on the BRI, with experts believing that the total outlay could reach $8 trillion by the time of completion. Investors seeking opportunities in the logistics sector are considering investing in trucking stocks with dividends and freight stocks.


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