In this article, we will discuss the 11 best logistics stocks to invest in right now.
The Logistics Industry: Current Dynamics
Logistics companies transporting goods around the world continue to navigate uncertainty as Donald Trump plans to impose 60% tariffs on goods from China and 25% tariffs on goods from Mexico and Canada. As reported by CNBC, Dave Bozeman, the new CEO of C.H. Robinson, sees an opportunity in Trump tariffs. The logistics giant is a top 3 carrier on the China-U.S. freight lane also carrying nearly 10% of the freight on the US-Mexico lane. Citi transportation analyst Ari Rosa considers the company’s business diversified enough to work through tariffs despite its global forwarding business being very exposed to China. The CEO’s stance on the tariffs was quite positive as well, as he stated:
“The freight still has to move. It might just move at a different starting point, and we would still be there to move that.”
In an interview with CNBC, Ravi Jakhar of the firm Allcargo Group, the world’s LCL consolidation leader and India’s largest integrated logistics solutions provider, reiterated optimism regarding the Trump tariff risks. He mentioned how over 4 years ago when sanctions came in from the Trump administration, the firm saw an increased import into its Vietnam offices from China and improved export out of Vietnam, alongside increased momentum in Indonesia and the Philippines. In his opinion, whether it is a short-term tariff sanction or a long-term structural trend, trade flows could change in terms of origins and destinations but the overall trade flows would remain robust as long as manufacturing and consumption are there.
As of what’s recent in the logistics landscape, the holiday season is in full swing, with holiday surcharges playing a crucial role in profitability for logistics companies since they charge their big retail customers extra fees on a per-package basis compared to their June volume during the busy holiday season. The increase in e-commerce is also benefitting such logistics providers and full truckload carriers. Simultaneously, an increase in freight in anticipation of future tariffs is also being seen.
A survey from Merchants Fleet and Atomik Research of decision-makers in organizations that typically transport freights of consumer-packaged goods throughout the US revealed that 88% saw AI as useful in alleviating pressures on their fleets this peak delivery season. AI’s data-driven capabilities are to streamline operations and decision-making, with the majority of the respondents citing supply chain optimization as a primary benefit. Other advantages mentioned were improved route optimization, enhanced inventory management, and reduced downtime by identifying maintenance issues with fleet vehicles.
With that being said, let’s move to the 11 best logistics stocks to invest in.
Our Methodology:
In order to compile a list of the 11 best logistics stocks to invest in right now, we went through stock screeners, ETFs, and media reports to make a list of relevant stocks. Moving on, we shortlisted the top 11 stocks from our list which had the highest number of hedge fund holders. The 11 best logistics stocks to invest in right now have been arranged in ascending order of their hedge fund holders as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
11 Best Logistics Stocks to Invest In
11. C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW)
Number of Hedge Funds: 30
C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) offers freight transportation and logistics, outsource solutions, produce sourcing, and information services to customers through a network of offices in North America, South America, Europe, Asia, and Oceania. The company has been shaping logistics for more than 115 years as it has grown from a wholesale produce brokerage house in North Dakota to the world’s most powerful logistics platform.
CHRW is a global logistics giant, with more than 90,000 customers and 450,000 contract carriers in its network trusting it to manage $22 billion in freight annually. The company enables the seamless delivery of goods across industries and continents via truckload, less-than-truckload, ocean, air, and beyond, through its unparalleled scale expertise, and tailored solutions. The focus on meeting the needs of customers, contract carriers, and suppliers has positioned CHRW as a leader in freight transportation, supply chain logistics, and produce sourcing.
The financials came in strong for the global logistics leader as it posted a significant year-over-year increase in profitability in 2024’s third quarter. This was a result of strong execution, disciplined volume growth, and improvement in gross profit, productivity, and operating leverage, despite a historically prolonged freight recession.
The company has also implemented a new lean-based operating model enhancing execution, discipline, and accountability across the company. Commenting on the good start for the new operating model, C.H. Robinson’s President and Chief Executive Officer, Dave Bozeman, said:
“Empowering our people with the Robinson operating model is creating a flywheel of performance, talent development and accountability that is evolving our culture to be driven by progress, execution and proactive problem identification and resolution. This is showing up in improvements such as more disciplined pricing and better decisions on the volume that we’re seeking. We are still early in our journey, but the operating model is helping us execute a solid strategy even better, and we expect further improvement as our team continues to embrace this new way of operating”
10. Saia, Inc. (NASDAQ:SAIA)
Number of Hedge Funds: 32
Saia, Inc. (NASDAQ:SAIA), through its wholly-owned subsidiaries, is a transportation company headquartered in Georgia. The firm offers less-than-truckload (LTL) services as well as a wide range of other value-added services, including non-asset truckload, expedited, and logistics services across North America. Saia LTL Freight, a wholly-owned subsidiary of Saia, Inc., is a leading LTL carrier serving 45 states and providing LTL services to Canada and Mexico. The company owns Saia LTL Freight and two other service groups, LinkEx and Saia Logistics Services.
Saia Inc. (NASDAQ: SAIA) remains at the forefront of delivering excellence in transportation. The company recently celebrated Saia LTL Freight’s 100th anniversary, a journey that has established it as one of North America’s leading transportation companies. Saia currently operates 213 terminals across the US and owns a fleet of more than 6,500 tractors and 22,000 trailers. The firm’s s dedication to innovation, efficiency, and customer service is evident from its announcement of making a planned $1 billion investment in its operations this year.
Saia’s innovation and forward-thinking approach continues to strengthen its position. On December 18, the company announced that Saia LTL Freight is partnering with Tesla to introduce two of the company’s first Tesla Semi trucks to its fleet. With Saia becoming one of the early testers of Tesla’s state-of-the-art electric semi trucks, the partnership marks another significant milestone for the company and demonstrates its solid commitment to exploring the latest technology to better serve its customers.
9. GXO Logistics, Inc. (NYSE:GXO)
Number of Hedge Funds: 33
GXO Logistics, Inc. (NYSE:GXO) is the world’s largest pure-play contract logistics provider. The company provides warehousing and distribution, order fulfillment, e-commerce, reverse logistics, and other supply chain services. It serves a range of industries including aerospace, agribusiness, e-commerce, healthcare, and public sector among others. The company is headquartered in Greenwich, Connecticut.
GXO serves as a global leader in offering cutting-edge logistics solutions for multinational companies and blue-chip market leaders. The company’s extensive experience in B2B and B2C verticals and its significant investments in innovation have positioned it strongly to capitalize on the industry tailwinds including growth in e-commerce, customer demand for advanced automation, and the trend toward outsourcing supply chain services.
The business momentum stays strong for GXO Logistics, Inc. (NYSE:GXO) as the firm closed the third quarter of 2024 with a record quarterly revenue of $3.2 billion, which reflected growth of 28% year-over-year as well as a sequential improvement in organic revenue growth and strong free cash flow. Another major milestone for GXO was signing approximately $750 million in annualized revenue year to date which makes the firm all set to deliver a record year for new business wins in 2024.
The aforementioned tailwinds continue to drive the company’s performance, with the rising demand for e-commerce capacity being a major one. This is evident from the fact that over half of the firm’s new wins in the third quarter originated from e-fulfillment while GXO also opened the largest ecommerce warehouse in France.
8. Old Dominion Freight Line, Inc. (NASDAQ:ODFL)
Number of Hedge Funds: 38
Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is one of the largest North American less-than-truckload motor carriers. The firm offers regional, inter-regional and national LTL services through a single integrated, union-free organization. ODFL also offers a range of value-added services including container drayage, truckload brokerage and supply chain consulting, other than its core LTL services.
The firm is a leading national LTL carrier, with third-party data validating its value proposition and opportunities for market share growth. The market share opportunity for Old Dominion Freight Line, Inc. (NASDAQ:ODFL) in the LTL market stays massive. The company is not just the leading but is deemed the best-positioned LTL carrier, with a solid history of significant revenue growth and profitability, superior customer service delivered at a fair price, ongoing opportunity to win market share, as well as an experienced and motivated team.
Furthermore, Old Dominion Freight Line, Inc. (NASDAQ:ODFL) continues to invest to keep moving forward, building on the aforementioned progress. The firm made significant real estate purchases from 2014 to 2023 of $2.1 billion to expand and improve the service center network. The capacity to grow supported by an unmatched investment in its network and equipment further reiterates the firm’s strong positioning.
7. J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT)
Number of Hedge Funds: 39
J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) is a Fortune 500 company with a strong vision of creating the most efficient transportation network in North America. The firm offers a range of freight transportation services to customers throughout the US, Canada, and Mexico. It operates through five segments including Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT).
While J.B. Hunt Transport Services has grown into an industry-leading transportation company, it started off with a handful of trucks back in 1961 in the US. It has lived an over 60-year legacy as a leader in the transportation and logistics industry. The company now has the ability to meet the unique shipping needs of any business, being powered by one of the biggest company-owned fleets in the country and third-party capacity through its J.B. Hunt 360° digital freight marketplace.
The company has distinct and complimentary businesses which are well-positioned. While Intermodal (JBI) boasts the largest drayage fleet in North America, Final Mile Services has the largest final mile asset network in the United States, and Truckload (JBT) has one of the largest capacity networks in North America.
During the third quarter of 2024, the firm saw a 3% year-over-year decline in operating revenue, driven by a 5% and 6% decrease in gross revenue per load in Intermodal (JBI) and Truckload (JBT), respectively, a decline in load volume of 10% and 6% in Integrated Capacity Solutions (ICS) and Dedicated Contract Services (DCS) respectively, and 6% fewer stops in Final Mile Services (FMS). This was offset by JBI load growth of 5% and a 3% rise in revenue per load in ICS.
6. United Parcel Service, Inc. (NYSE:UPS)
Number of Hedge Funds: 43
United Parcel Service, Inc. (NYSE:UPS) is one of the world’s largest package delivery companies which started with a $100 loan as two teenage entrepreneurs opened the American Messenger Company in 1907. The company offers a broad range of integrated logistics solutions for customers in over 200 countries and territories. It serves through business segments including U.S. Domestic Package, International Package, and Supply chain solutions.
UPS’s air network operates more than 360 daily flights and serves 26 countries and territories within Asia Pacific and more than 200 globally. A recent development in this regard was UPS introducing enhancements to its industry-leading air network through which customers in Asia Pacific can now have quicker deliveries to more than 35 countries across Asia, Africa, and the Middle East.
In the healthcare market, UPS is focused on the most complex part of the market where margins are most attractive. The company recently bolstered its healthcare logistics capabilities with cold-chain acquisitions as it announced to acquire Frigo-Trans which is an industry-leading, complex healthcare logistics provider based in Germany. UPS EVP and President of International, Healthcare, and Supply Chain Solutions Kate Gutmann, commented on the potential of the acquisition stating:
“Frigo-Trans will help deepen our portfolio of solutions for our customers and accelerate our journey to become the number one complex healthcare logistics provider in the world addressing their needs.”
It is worth mentioning that United Parcel Service, Inc. (NYSE:UPS) has been resilient through a challenging 18-month period and finally returned to revenue and profit growth in the third quarter of 2024. UPS made $22.2 billion in consolidated revenues, a 5.6% rise from the third quarter of 2023 while consolidated operating profit was up 47.8% year-over-year. All three business segments recorded revenue increases over the year. As the firm closed the quarter, it looked forward to continuing the progress and delivering another successful holiday season.
5. Norfolk Southern Corporation (NYSE:NSC)
Number of Hedge Funds: 47
Norfolk Southern Corporation (NYSE:NSC) is one of the premier transportation companies in the United States that specializes in rail freight services. The company has been moving the goods and materials that power the US economy since 1827. Norfolk Southern Corporation operates in 22 states with connections across the globe.
The transportation company has the privilege of having the most extensive intermodal network in the eastern United States. Other than a franchise built for growth, Norfolk Southern Corporation has a powerful rail network that serves the fastest-growing segments of the American economy. It serves a majority of the national population and manufacturing base, with connections to every major container port on the Atlantic coast in addition to major ports in the Gulf of Mexico and Great Lakes.
Norfolk Southern Corporation (NYSE:NSC) remains well positioned for long-term value creation as it successfully delivered sequential and year-over-year margin improvement in the third quarter of 2024 which places it back on track to achieve its adjusted operating ratio targets for the second half and full year 2024. The company achieved 3% higher revenue and 23% higher adjusted earnings per share compared to the last year.
4. XPO, Inc. (NYSE:XPO)
Number of Hedge Funds: 48
XPO, Inc. (NYSE:XPO) serves as a leader in asset-based less-than-truckload (LTL) freight transportation in North America. The firm caters to approximately 54,000 customers with 611 locations and 38,000 employees in North America and Europe, with headquarters in Greenwich, Connecticut.
XPO has been in the LTL business for over three decades, with 18 billion pounds of freight moved per year, enabled by its proprietary technology. The firm benefits from an extensive network offering coast-to-coast coverage as it covers 99% of all US zip codes. The network doesn’t end here as the firm offers efficient cross-border and offshore service to Canada, Mexico, Alaska, Hawaii, and Puerto Rico. The firm manages volume for customers of every size with 9,600 tractors, 34,000 trailers, and more than 13,000 professional drivers.
The North American LTL industry offers a compelling environment to XPO, Inc. (NYSE:XPO). Favorable industry dynamics include a $52 billion bedrock industry for the US economy with almost 75% share held by top 10 LTL players, diverse demand across verticals, and an attractive pricing environment for over a decade, with a positive year-over-year industry pricing each year.
While a soft freight environment was experienced in the third quarter, XPO, Inc. (NYSE:XPO) successfully boosted its adjusted EBITDA by 20% and adjusted diluted EPS by 16%, companywide. Due to higher yield in the North American LTL segment and volume growth in the European Transportation segment, revenue increased year-over-year. Regarding the future, the chief executive officer of XPO, Mario Harik, remains confident in the positioning of the business to accelerate earnings growth on the freight market recovery.
3. CSX Corporation (NASDAQ:CSX)
Number of Hedge Funds: 51
CSX Corporation (NASDAQ:CSX) serves as a leading supplier of rail-based freight transportation in North America. The firm’s rail and intermodal businesses offer rail-based transportation services including traditional rail service and the transport of intermodal containers and trailers.
The firm is a dominant transportation supplier in the US with nearly two-thirds of Americans living within CSX’s service territory. The firm’s transportation network serves some of the largest population centers in the country and encompasses around 20,000 route miles of track in 26 states, the District of Columbia, and the Canadian provinces of Ontario and Quebec. Additionally, CSX has access to more than 70 ocean, river, and lake port terminals along the Atlantic and Gulf Coasts, the Mississippi River, the Great Lakes, and the St. Lawrence Seaway.
The dominant US transportation supplier was successful in delivering meaningful growth in volume, operating income, and operating margin in the third quarter of 2024. Regardless of the hurricanes the business encountered, CSX’s established network remained resilient.
2. FedEx Corporation (NYSE:FDX)
Number of Hedge Funds: 55
FedEx Corporation (NYSE:FDX) offers a broad portfolio of transportation, e-commerce, and business services to customers and businesses worldwide. The firm is quite known for FedEx Express which pioneered overnight delivery as its flagship service. FDX has expanded its operations over the years and now operates through FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services segments.
FedEx Corporation has an unrivaled global network linking more than 99% of the world’s GDP. This network spans over 220 countries and territories, including every address in the US, over 5,000 operating facilities, 705 aircraft, and over 200,000 motorized vehicles. The firm successfully delivers more than 17 million shipments per day.
The firm’s independent operating companies boast special strengths and capabilities making FDX a powerhouse that enables businesses to connect to each other, their customers, and the world. In this regard, a recent strategic move from the firm was its announced intent to separate FedEx Freight into an independent and a new publicly listed less-than-truckload industry company. The separation is expected to be executed within the next 18 months and will result in the two industry-leading public companies, FedEx and FedEx Freight, benefiting from distinct and compelling investment profiles.
Analysts reiterated the spin-off plan to fortify the firm’s core business. With the expected timeline of 18 months, some analysts think FedEx will be able to cut risks and separate the business when freight demand is favorable, as reported by Reuters. The separation is expected to enable FedEx to improve its focus on catering to the impact of soft industrial shipping demand and a shift away from higher-priced deliveries among customers. Regarding the spin-off, BMO Capital Markets analyst Fadi Chamoun stated:
“The decision to proceed with a full separation of the LTL segment has the potential to unlock significant value and is a welcomed holiday gift to FDX shareholders”
1. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Funds: 78
Union Pacific Corporation (NYSE:UNP) is a railroad holding company headquartered in Omaha, Nebraska. Union Pacific Railroad, the principal operating company of Union Pacific Corporation, provides a critical link in the global supply chain by connecting 23 states in the western two-thirds of the US by rail.
Union Pacific was established by President Abraham Lincoln in 1862 and has been building America for over 160 years. The company is uniquely positioned as it serves many of the fastest-growing population centers in the United States while operating from all major West Coast and Gulf Coast ports to eastern gateways and seamlessly connecting with Canada’s rail systems. It is the only railroad serving all six major Mexico gateways.
Union Pacific Corporation (NYSE:UNP) has already laid the foundation for its success as it posted year-over-year improvements for the trailing 12 months ended June 30, 2024, in reportable injury rates, freight car velocity, and locomotive productivity among other major metrics. Recently, the company closed 2024’s third quarter, demonstrating strategic success. Improved safety and service performance drove solid revenue growth which translated into third-quarter earnings per diluted share up 10% and operating income up 11%. Hence, the firm is positioned well to lead in safety, service, and operational excellence
While we acknowledge the potential of UNP as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than UNP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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