下面是小编为大家整理的冬季会议和管理会议问题手册,供大家参考。
Transportation & Logistics Question Book for Winter Conference Season and Management Meetings
We compiled questions for each management team that will be on the road over the next month as 4Q earnings winds down and the winter conference circuit ramps up. In the document there are specific questions categorized by topic for individual companies as well as broader themes relevant for an entire group; see page two for a complete listing of companies covered in this note. We will update this question book in early March prior to the J.P. Morgan Aviation, Transportation and Industrials conference held in New York City on March 5-7.
North America Equity Research 11 February 2019
Airfreight & Surface Transportation Brian P. Ossenbeck, CFA AC
(1-212) 622-1023 brian.p.ossenbeck@jpmorgan.com Bloomberg JPMA OSSENBECK <GO> J.P. Morgan Securities LLC Caleb B Hogan (1-212) 622-9207 caleb.b.hogan@jpmorgan.com J.P. Morgan Securities LLC Lacey-Ann Wisdom (1-212) 622-9566 lacey-ann.wisdom@jpmchase.com J.P. Morgan Securities LLC Sanket P Parab (1-212) 622-0608 sanket.p.parab@jpmorgan.com J.P. Morgan India Private Limited
See page 31 for analyst certification and important disclosures, including non-US analyst disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.jpmorganmarkets.com
Table of Contents Parcel Carriers ..........................................................................3 FedEx (FDX, $233, OW) .............................................................................................4 United Parcel Service (UPS, $122, N) .........................................................................6 Railroads ...................................................................................8 Canadian Pacific (CP, C$337, OW) .............................................................................9 CSX (CSX, $86, OW) ................................................................................................ 10 Norfolk Southern (NSC, $203, OW) .......................................................................... 11 Union Pacific (UNP, $177, N) ................................................................................... 12 Kansas City Southern (KSU, $122, N) ...................................................................... 13 Canadian National (CNR CN, C$116, N) .................................................................. 14 Genesee & Wyoming (GWR, $88, N) ....................................................................... 15 Truckload Carriers & Brokers ............................................... 16 C.H. Robinson (CHRW, $94, N) ............................................................................... 17 Echo Global (ECHO, $28, OW) ................................................................................ 18 Schneider National (SNDR, $23, N) .......................................................................... 19 Werner Enterprises (WERN, $32, UW) ..................................................................... 20 Knight-Swift Transportation (KNX, $36, N) ............................................................. 21 Heartland Express (HTLD, $15, UW) ....................................................................... 22 U.S. Xpress (USX, $11, OW) .................................................................................... 23 Intermodal ............................................................................... 24 J.B. Hunt (JBHT, $118, N) ........................................................................................ 25 Hub Group (HUBG, $48, N) ...................................................................................... 26 Logistics & LTL....................................................................... 27 XPO Logistics (XPO, $84, OW) ................................................................................ 28 Ryder (R, $50, UW) ................................................................................................... 30
Parcel Carriers Key questions and themes for the group How would the U.S. withdrawal from the UPU affect import and export volume through foreign posts as well as the cost of delivering e-commerce? Will the STOP Act and the mandatory collection of electronic data by the USPS in 2021 affect the mix of international mail and express shipments? How have the recent package and parcel select rate hikes from the USPS had an appreciable impact on the market? How successful have the efforts to build synthetic density been over the last several years in the U.S.? Will this actually take hold and help bend the cost curve and if so, what is needed to see meaningful improvement? Is the next phase of package volume growth in the U.S. solely driven by lower yielding B2C deliveries which will require a more efficient network to prevent margin compression? Could there be a time when e-commerce grows so large that a direct to consumer network devoted solely to deferred volumes could operate separate from express or are there too many synergies and shared resources for the two to operate independently? The U.K. e-commerce market has been unusually weak during November and December, have these trends continued in January and affected more than just retail-based and consumer shipments? What is the near and long term strategy for expanding B2B e-commerce? Is the roll-out of FedEx Extra Hours and extended cutoff times extending the misconception of “free shipping"? What types of packages and service thresholds would see increased competition from an expanding air network?
FedEx (FDX, $233, OW) Trade and macro How much volume is tied to China and other areas currently experiencing volatility due to trade tensions and tariffs? Have airfreight rates reacted to recent trade tension, FX volatility, or pull forward of shipments ahead of tariffs? Will lower oil prices provide a tailwind in terms of mix shift? How much does fuel impact the income statement on a quarterly basis if now the fuel surcharges have moved to a two week lag?
M&A How much of TNT integration costs have been lapped? What have been the major costs of the integration other than recovery from the cyber attack?
How much will lower TNT integration expenses, pension funding and capital expenditures boost FY20 free cash flow versus FY19?
Will union involvement and agreements in Europe present an ongoing headwind to streamlining operations at TNT?
Express What is FedEx’s strategy for gaining market share in Europe against more established competitors? How much involvement does Express have in the extra hours program from both a pick-up and delivery perspective? What steps has the company taken to flex the network assets in order to adjust for slower growth and weaker mix in 2019? What are the implications of a hard or no-deal Brexit for Express? Why did UPS not face nearly the same headwinds from China and Europe?
Ground How has the transition to six day delivery year-round been received by shippers and the company’s independent service providers? Are there limits placed on shippers to participate in either the six day delivery or extra hours? Will the next wave of investments be primarily centered on automated satellites and smaller facilities to build point to point lane density? What are some of the potential efficiency measures and productivity gains targeted within the segment that are scalable to the ISP providers? Is there still room to expand yield or are the next several years going to be more of a focus on cost avoidance?
Freight Has the looser truckload market begun to impact the LTL business? Is the dual service offering still a competitive advantage? How far along is Freight in utilizing technology on the cross-docks, driver routing, and customer interactions? If segment margins are not yet double digits in one of the strongest freight markets in decades, what needs to be improved to reach this goal? How will the company provide a different solution for heavy home goods and white glove delivery service than other competitors within the space?
Technology Currently Chanje vehicles only represent a small percentage of the company"s total fleet, is there an option for FedEx to expand its partnership with Chanje to bring on more electrical vehicles? What are some limitations to the expansion of an electric vehicle fleet? Does sufficient infrastructure in the form of charging stations and maintenance locations currently exist? What would be necessary to make it economical to make electric vehicle adoption more widespread within FedEx"s fleet?
Disruption Amazon recently announced that it would eliminate surcharges on its shipping platform, will the company consider modifying other surcharges to remain competitive similar to the residential charge over the holidays? What are the implications of the recent disclosure that Amazon is no more than 1.3% of consolidated revenues?
United Parcel Service (UPS, $122, N) Trade and macro What has been impact of trade tensions and tariffs on international volumes and demand globally? Are customers still adjusting supply chains in response to the ongoing uncertainty? Have airfreight volumes reacted to recent geopolitical volatility or trade tariffs? Is UPS more or less sensitive to global economic growth than it was during the Global Financial Crisis? Will lower oil prices provide a tailwind in terms of mix shift? How much does fuel impact the income statement on a quarterly basis if now the fuel surcharges have moved to a two week lag?
U.S. Domestic How much does the extension of useful asset lives in 3Q18 help boost expected operating income during 2019? Can SMB and B2B growth continue at the recent pace without offering incentives and other concessions to shippers? Base rates have increased over 3% in 2018, is that a sustaina...
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