Freight Recession: 5 Stocks To Watch As Transportation Costs Plummet To Pre-Covid Levels

Although it went almost undetected by the market, some astute investors may have caught up on a specific detail in the latest Fed Beige Book.
The contacts through which each Federal Reserve department receives information on the condition of the economy have indicated the presence of a "freight recession", which is weighing on the transportation industry and resulting in steep price declines.
These concerns are backed by data. The Freightos Baltic Index (FBX), the leading global container freight index used as a benchmark for the cost of shipping goods via containers on major routes around the globe, has plummeted to levels not seen since March 2020, when the Covid-19 pandemic began. 
The global average cost for an ocean freight container at the end of May was roughly $1,400, a considerable decline from the over $7,000 recorded a year ago and a far cry from the all-time high of $11,100 achieved in September 2021. These data emphasize the significant decrease in transportation costs as well as the current state of the industry. 
A pertinent question arises: Are U.S. stocks in the transportation and freight sectors reflecting this pessimistic outlook?

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5 Transportation Stocks That Could Be Impacted By The Freight Crisis

1) United Parcel Service, Inc. UPS

• United Parcel Service, Inc. is the biggest transportation firm in the United States, offering services such as transportation and delivery, distribution, contract logistics, ocean freight, air freight, customs brokerage, and insurance. 
• The stock is down 3% year to date, as of June 1, but it's still about 40% higher than early 2020 levels, prior to the Covid-19 pandemic. 
• The company's 12-month forward P/E ratio is 15x, according to Benzinga Pro data.

Chart: UPS's Stock Price & Performance Since 2020

2) FedEx Corporation FDX

• FedEx offers express transportation, small-package ground delivery, and freight transportation services.
• Its shares are up 24% year to date, as of June 1, and are still about 45% higher than January 2020 levels.
• The company's 12-month forward P/E ratio is 13x.

Chart: FDX's Stock Price & Performance Since 2020

3) C.H. Robison Worldwide, Inc. CHRW

• C.H. Robinson Worldwide, offers freight transportation services, and related logistics and supply chain services worldwide.
• Its shares are up 3% year to date, as of June 1, and are still about 21% higher than January 2020 levels.
• The company's 12-month forward P/E ratio is 24x.
• Chart: CHRW's Stock Price And Performance Since 2020
• 

4) J.B. Hunt Transport Services, Inc. JBHT

• J.B. Hunt Transport Services, Inc. provides surface transportation, delivery, and logistic services in North America.
• Its shares are down 3% year to date, as of June 1, and are still about 45% higher than January 2020 levels.
• The company's 12-month forward P/E ratio is 20x.
• Chart: JBHT's Stock Price & Performance Since 2020
• 

5) CSX Corporation CSX

• CSX Corporation provides rail-based freight transportation services both in North America and globally. 
• Its shares are broadly flat year to date, as of June 1, and are still about 30% higher than January 2020 levels.
• The company's 12-month forward P/E ratio is 16x.
• Chart: CSX's Stock Price & Performance Since 2020

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