We recently compiled a list of the 10 Best Shipping Stocks To Invest In Now. In this article, we are going to take a look at where FedEx Corporation (NYSE:FDX) stands against other best shipping stocks to invest in now.
Shipping refers to the transportation of goods and commodities from one place to another, encompassing various modes of transportation such as road, rail, air, and sea. The shipping industry plays a vital role in connecting businesses and consumers across the globe by facilitating the exchange of goods and driving economic growth. From the delivery of online purchases to the transportation of raw materials and finished goods, shipping plays an essential component of modern commerce. According to a report by Fortune Business Insights, the cargo shipping market size was recorded at 11.89 billion tons in 2024 and is expected to reach 14.72 billion tons by 2032, exhibiting a CAGR of 2.7%. The industry is diverse, with companies specializing in different modes of transportation, such as trucking, rail freight, air cargo, and marine shipping, as well as logistics and courier services.
Investing in shipping stocks can be a lucrative opportunity, as the industry is closely tied to consumer spending, economic growth, and global trade. As e-commerce continues to grow, the demand for fast and reliable shipping services is increasing, driving up revenues and profits for shipping companies. Additionally, the rise of just-in-time manufacturing and same-day delivery is creating new opportunities for companies that can provide flexible and efficient logistics solutions. The shipping industry is also experiencing a shift towards digitalization, with the adoption of technologies such as blockchain, artificial intelligence, and the Internet of Things (IoT) to improve efficiency, reduce costs, and enhance customer experience.
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According to a report by Hillebrand Gori, part of DHL Global, the shipping industry has experienced significant growth and evolution in 2024, marked by both opportunities and challenges. The report highlights the persistent growth in demand, driven by strong market activity across key regions, particularly in North and Latin America.
The growth in demand has been met with an expansion in the global container fleet, which is set to increase by a further 5% in 2025. However, the report notes that operational challenges, such as re-routings due to geopolitical risks in regions like the Red Sea, continue to affect capacity and scheduling. Vessels are often rerouted, leading to delays and higher fuel costs. Additionally, labor unrest in countries such as India and on the U.S. East Coast disrupted supply chains. Companies must adapt to these pressures by investing in resilient logistics solutions and closely monitoring geopolitical developments.
The report also notes that ocean freight rates have been volatile in 2024, primarily due to capacity shortages and rerouting costs. While rates may soften in certain trade lanes, others, such as those connecting Oceania and the Atlantic, are expected to remain high. Looking ahead, the report suggests that the shipping industry will continue to experience both opportunities and uncertainties.
The shipping industry plays a vital role in facilitating trade and connecting markets in the global economy. As e-commerce growth accelerates, and the economy stabilizes, shipping companies are well-positioned to capitalize on emerging opportunities.
A driver unloading packages from a van for a time-critical delivery.
Our Methodology
To compile our list of the 10 best shipping stocks to invest in now, we scanned transportation ETFs plus online rankings to compile an initial list of 25 companies that offer shipping services. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? 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).
FedEx Corporation (NYSE:FDX)
Number of Hedge Fund Investors: 55
FedEx Corporation (NYSE:FDX) is a global leader in the express shipping and logistics industry. The company has a vast network that spans more than 220 countries and territories, which helps deliver nearly 17 million packages each business day and connects over 3 million shippers with 225 million consumers. FedEx Corporation’s (NYSE:FDX) advanced logistics network ensures reliable and time-sensitive shipping solutions, making it an indispensable partner for industries such as e-commerce, healthcare, and retail.
FedEx Corporation (NYSE:FDX) is implementing a series of strategic initiatives to drive future growth and enhance its market position. One of the key initiatives is the DRIVE (Delivering Reliability, Innovation, and Value every day) program. DRIVE is a comprehensive business architecture that leverages data and technology to drive continuous improvement in network optimization, technology, and cost management. The DRIVE initiative is expected to deliver $4 billion in savings by the end of FY ‘25 versus the FY ‘23 baseline. FedEx Corporation (NYSE:FDX) is also implementing Network 2.0, which aims to streamline operations by consolidating facilities and optimizing routes, with a target of $2 billion in savings by the end of fiscal year 2027.
FedEx Corporation (NYSE:FDX) is also targeting the $80 billion air freight market with its Tricolor strategy, which aims to improve density and asset utilization. The company has created a dedicated sales team for this and is investing in digital tools to enhance the customer experience and capture market share. Furthermore, FedEx Corporation (NYSE:FDX) is strategically expanding its presence in key markets to capture new growth opportunities. The company is targeting high-value segments such as healthcare and automotive, where it is leveraging its unique portfolio, including cold chain support and specialized services, to gain market share.
Overall FDX ranks 2nd on our list of the best shipping stocks to invest in now. While we acknowledge the potential of FDX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FDX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
