Logistics infrastructure and transportation services have been the liability of countries
and governments for decades, or these have been under strict regulation policies. One
of the first branches opened for competition in EU as well as in other continents, has
been air transports (operators, like passenger and freight) and road transports. These
have resulted on lower costs, better connectivity and in most of the cases higher
service quality. However, quite large amount of other logistics related activities are
still directly (or indirectly) under governmental influence, e.g. railway infrastructure,
road infrastructure, railway operations, airports, and sea ports. Due to the
globalization, governmental influence is not that necessary in this sector, since
transportation needs have increased with much more significant phase as compared to
economic growth. Also freight transportation needs do not correlate with passenger
side, due to the reason that only small number of areas in the world have specialized
in the production of particular goods. Therefore, in number of cases public-private
partnership, or even privately owned companies operating in these sub-branches have
been identified as beneficial for countries, customers and further economic growth.
The objective of this research work is to shed more light on these kinds of
experiments, especially in the relatively unknown sub-branches of logistics like
railways, airports and sea container transports. In this research work we have selected
companies having public listed status in some stock exchange, and have needed
amount of financial scale to be considered as serious company rather than start-up
phase venture.
Our research results show that railways and airports usually need high fixed
investments, but have showed in the last five years generally good financial
performance, both in terms of profitability and cash flow. In contrary to common
belief of prosperity in globally growing container transports, sea vessel operators of
containers have not shown that impressive financial performance. Generally margins
in this business are thin, and profitability has been sacrificed in front of high growth –
this also concerns cash flow performance, which has been lower too. However, as we
examine these three logistics sub-branches through shareholder value development
angle during time period of 2002-2007, we were surprised to find out that all of these
three have outperformed general stock market indexes in this period. More surprising
is the result that financially a bit less performing sea container transportation sector
shows highest shareholder value gain in the examination period. Thus, it should be
remembered that provided analysis shows only limited picture, since e.g. dividends
were not taken into consideration in this research work. Therefore, e.g. US railway
operators have disadvantage to other in the analysis, since they have been able to
provide dividends for shareholders in long period of time. Based on this research
work we argue that investment on transportation/logistics sector seems to be safe
alternative, which yields with relatively low risk high gain. Although global economy
would face smaller growth period, this sector seems to provide opportunities in more
demanding situation as well.
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