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Why United Parcel Service (UPS) Is One of the Best Freight Stocks to Buy Now?
We recently published a list of 11 Best Freight Stocks To Buy Now. In this article, we are going to look at where United Parcel Service, Inc. (NYSE:UPS) stands against other best freight stocks to buy now.
While logistics oversees the overall supply chain strategy, including inventory management, warehousing, and customer service, the freight market refers to the industry involved in the transportation of goods from one location to another using various modes such as road, rail, air, and sea. According to a report by Precedence Research, the global freight transport market is valued at $34.53 billion in 2024 and is expected to reach $100.81 billion by 2034, representing a compound annual growth rate (CAGR) of 11.31%. North America is estimated to have a market size of $11.74 billion in 2024 and is forecasted to grow at a robust CAGR of 11.45% during the same period. Trade within the North American region, particularly between the United States, Mexico, and Canada, plays a vital role.
In 2023, the US transborder freight flows with these countries totaled $1.57 trillion. Several factors, such as increasing international trade, the expansion retail industry, and the growth of e-commerce platforms are boosting the demand for secure and faster freight services. Similar to other industries, the freight market is also witnessing a rise in sustainability efforts and technological integration. Artificial intelligence, in particular, is revolutionizing the industry by enhancing efficiency and optimizing operations. AI applications, such as real-time inventory monitoring, smart warehousing, traffic management, and freight-matching platforms, are streamlining freight processes.
President-elect Donald Trump’s proposed tariffs on key trade partners such as China, Mexico, and Canada could severely impact the US transportation industry. Sector experts warn that these tariffs could undermine the growth of North American trade and warned that the proposed trade policies could inadvertently harm the US businesses Trump aims to support. Jason Miller, interim chair of supply-chain management at Michigan State University, explained that higher tariffs would drive up prices, reducing demand and leading to a decline in freight movement. This trend could pose revenue risks for major companies dependent on freight activity.
On December 13, Reuters reported that Trump’s tariff strategy, aimed at creating jobs and compensating for lost revenue from planned tax cuts, effectively acts as a new tax on consumers, whose spending drives the US economy. According to Mary Lovely, a senior fellow at the Peterson Institute for International Economics, the tariffs could significantly disrupt trade flows. She predicts that the new administration could implement these measures as early as the second or third quarter of 2025.
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