Investing In The Trucking Industry


Investing In The Trucking IndustryInvesting in the trucking industry is like investing in any other industry, you have your risk and you have your rewards. Any investor knows that when you invest in a specific industry, you have to be aware of the business cycle. The trucking industry is classified in this group. Trucking industry stocks react to the economy. When the economy is growing and consumers are spending, when you see manufacturing picking up, this is always a strong indicator for growth in related stocks.

Estimates say that the American trucking industry is worth as much as 2 trillion dollars. This equals big opportunity for investors. Look at the United States, we hold some of the largest truck manufacturers in the world. This includes light-duty trucks, medium-duty trucks and heavy-duty trucks as they are classified. Paccar, Peterbilt and Kenworth are huge truck manufacturers from North America.

Opportunities are everywhere and we’ve seen that international truck manufacturers can not only compete in America, they can compete all around the world. Take Daimier and Volvo for example. According to Bloomberg, Daimier and Volvo controlled 55 percent of North American trucking market. The largest country that rules the trucking market is not in North America, nor Daimier or Volvo. Rather, it is China. China is the world’s largest heavy-duty retailers, controlling nearly half of the world’s sales.

We’re still thinking U.S. trucking industry though although if you’re investing in the trucking industry, you have opportunity across the globe. Heavy-duty trucks account for a large portion of all truck sales, in the U.S. and all around the world. What is your biggest component in heavy-duty trucks? Parts of course. Tires, axles, chassis, no heavy-duty truck parts are cheap. Big opportunity lies here but we want to look at diesel engines. The global heavy-duty truck diesel engine market is worth $171.5 billion dollars according to Freedonia Group. This market is expected to grow at nearly 8 percent a year up to 2017.

Look at the transportation market in general. We have truck, train, flying and transport by water. 4 main ways to haul goods. Think about how quick we can fly products from one location to another. Huge shipments can travel by water and train also. If you combine train, flying and water, they still don’t measure up to shipment by trucking. The trucking industry controls nearly 69 percent of all shipped freight by various transportation types. Experts suggest a 2 percent increase by 2025. It doesn’t sound like much but your talking about adding billions of dollars.

How much money is the U.S. trucking industry bringing in? In 2013, the trucking industry accounted for $682 billion dollars in revenue. This accounted for 81 percent of total freight revenue. The U.S. trucking industry moved 9.7 billion tons of freight. That rate is expected to grow in 2014.

There’s several good truck industry stocks out there performing well if you’re thinking about investing in the trucking industry. Cummins is at $141.39 a share right now. Eaton Corp. is at $67.61 so far in 2014. U.P.S. is at $95.94 a share. There’s plenty of investment opportunities in trucking and transportation.

Networking is so crucial in transportation and trucking. It’s important to the economy, important to sales. Look at all the mergers over the last few years, last decade or two. In order to rival the competition, smaller companies are merging together. When you see this, you usually get a strong market. If your considering investing in the trucking industry, this is a great time to get in.