By Jeff Berman, Group News Editor · August 27, 2020
It is well known that the large, publicly traded companies in the logistics sector are well capitalized. That pretty much goes without saying. But data issued from Buy Shares, a United Kingdom-based financial advisory takes that thesis to a different level, in showing how the market capitalization of ten selected publicly-traded logistics services providers, which have seen increased activity amid the ongoing COVID-19 pandemic have seen significant gains going back to the beginning of 2020.
To put that into better perspective, Buy Shares’ data indicated that the market cap of the ten companies—that have a total capitalization of $2.25 trillion—it selected is up cumulatively 83.27% year-to-date, through August 24. Looking at the numbers, the firm noted that the ten selected companies had a cumulative market capitalization of $1.23 trillion, which took on an additional $1.02 trillion over the next eight months.
While those data points are interesting on a standalone basis, Buy Shares noted that based on an analysis of financial data from the ten selected companies, pointed to how the surge on market capitalization directly correlated with the COVID-19 pandemic.
When looking at the selected companies and their respective market cap growth rates from January 1 to August 24, the increases cannot be overlooked.
For the ten selected companies, Buy Shares reported the following (January 1 market cap/August 24 market cap):
XPO Logistics, $7.33 billion/$7.85 billion (+7.09%);
C.H. Robinson, $10.55 billion/$13.07 billion (+23.88%);
J.B. Hunt Transport Services, $12.4 billion/$14.9 billion (+20.48 %);
ZTO Express, China, $18.26 billion/$25.17 billion (+37.84%);
Deutsche Post AG, Germany, $42.02 billion/$48.4 billion (+15.18%);
FedEx, $39.48 billion, $56.95 billion (+43%);
CSX Transportation, $55.93 billion, $57.46 billion (+2.73%);
UPS, $100.32 billion, $138.44 billion (+37.99%);
SF Holdings, China, $164.81 billion, $332.5 billion (+102.36%); and
SG Holdings, Japan, $781.3 billion, $1,553 trillion (+100.05%)
While there are major percentage spreads, in terms of market cap gains, it was not guaranteed, by any stretch, with the firm saying that logistics companies were directly affected by COVID-19, as there was a challenge related to protecting workers and customers.
As an integral part of the value chain, logistic firms facilitate trade and commerce and help businesses get their products to customers meaning this role was under threat due to the pandemic,” it said. “The pandemic threatened logistical and transportation slowdown with many experts spelling doom for the sector. With most people staying at home, they turned on logistic companies for the delivery of essential supplies,” the firm observed. “When the pandemic broke out, stocks for logistic companies plunged. However, they later rebounded thanks to their role in home deliveries that were boosted with a surge in e-commerce. For example in China, when the government imposed lockdowns, only logistics and delivery companies were allowed to carry out the delivery. The strategic role the delivery companies played during the pandemic contributed immensely to the surge in market capitalization of the selected companies.”
And looking ahead, the company noted it is key to look ahead and “plan for the new normal which will emerge post-coronavirus,” adding that the market cap values for the aforementioned companies may well have remained at lower levels, absent a strategic response to the pandemic.
While this is a fairly small sample size, the cumulative market cap is not at all. And that, again, speaks to the importance (and value) of logistics, in both calm times and turbulent times like these.
August 27, 2020
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