Transportation Services Sector
Brief Excerpt from Industry Overview Chapter:
Companies in this industry are primarily engaged in providing transportation services, including air transportation of passengers and freight; support activities to transportation; mail services under a universal service obligation; and air, surface, or combined mode courier and express deliver services of parcels not operating under a universal service obligation. Major companies include Union Pacific, United Airlines, UPS, US Postal Service, and YRC Freight (all based in the US), as well as AP Moller Maersk (Denmark), Deutsche Lufthansa and Deutsche Post (both based in Germany), and East Japan Railway and NYK Line (both based in Japan).
Transportation services companies depend highly on the health of the global economy, which affects manufacturing output, commodity trade, consumer and business spending, and business and leisure travel activity. Because many costs are fixed, the profitability of individual companies is determined by efficient operations and on favorable fuel and labor costs. Large companies enjoy economies of scale in purchasing and the ability to provide more extensive services. Small companies can compete by serving local or regional areas. The US industry is fragmented: the 50 largest firms generate about 40% of industry revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major industries within the transportation services sector include trucking (accounts for 30% of industry revenue), airlines (about 20%), water transportation, transit and ground passenger transportation, and pipeline transportation (each accounting for about 5%). Other services, accounting for about 30% of industry revenue, include scenic and sightseeing transportation
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