# Logistics?



## MrMatt (Dec 21, 2011)

I saw a Fedex Ad today, and it made me think of shipping.
Any thoughts on Fedex, UPS DHL, and others? What about more industrial logistics? 3rd party warehousing etc?
Risks? Opportunities?

There was some recent interest in railroads, shipping is really dependant on Global trade, not sure how that is going?

I mail order a pile of stuff, with the excellent return policies of some stores it's convenient. Why drive 15-30 minutes out and back to see their limited selection, just order it, they pull your size and ship it to your door, if you don't like it, return it, often for free at the local postal outlet.

Big risk I see is if the national mail systems step up and become more competative. But if they scale back, or the corporate competition steps up lower cost options there could be a big win.


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## bayview (Nov 6, 2011)

Fedex issued a profit warning last quarter. 

Some global airlines already reducing their cargo capacity


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## HaroldCrump (Jun 10, 2009)

MrMatt said:


> I saw a Fedex Ad today, and it made me think of shipping.
> Any thoughts on Fedex, UPS DHL, and others? What about more industrial logistics? 3rd party warehousing etc?
> Risks? Opportunities?


These are all bellwethers of global economic activity.
By and large, they reflect the global GDP growth.
By the same token, they are exposed to any and all imaginable risks such as oil prices, political turmoil, extreme weather related disruptions, recessions, etc.

Going long on these is essentially a play of significant global recovery across the board.
Also an assumption that the company will be able to manage operational costs effectively i.e. hedge energy prices, etc.

If you do consider a long position in these companies, look into whether you can eke out additional returns using options.
Other than that, I suspect returns will be anemic at best.

For logistics, it is better to buy local.
That way you are exposed to a smaller set of known risks and conditions.

In the Canadian market, that would be companies such as TransForce or industrial REITs such as AAR.


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