Structure of the Air Freight & Logistics Industry
The highly competitive air freight and logistics industry is heavily tied to cyclical domestic economic expansion (primarily from retail good shipments). The international freight market remains a critical growth engine for air cargo providers, while all constituents deal with the cost of rising fuel (diesel) prices and potentially price-sensitive demand during periods of economic weakness. Firms with freight-forwarding, asset-light operations and/or large difficult-to-replicate shipping networks can carve out sustainable competitive advantages while generating high returns on investment. We generally like the group.
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