Industry Overview A vital part of human life as we now know it is only possible because of the commercial transportation industry. The industry provides a way of transportation of people, product, materials, and also includes warehousing and storage for goods as well as any other supporting activities. The industry has many impacts on the world today and will have a larger impact on the future. Fragments of this industry can be broken into three different areas; shipping, passenger transport, and equipment manufacturing. Passenger transport includes sight-seeing transportation as well as basic traveling conditions. Equipment manufacturing consists of actually producing the equipment used in the transportation industry, such as trucks, airplanes, and ships. Focusing on the key portion within the industry, shipping is vital for the world to maintain its’ balance and to be able to develop on a local and global level. Within the shipping sector of commercial transportation industry, there are different factors that determine how this sector operates. Means of shipping include but are not limited to air, rail, water, road, pipeline transportation, couriers, and the postal service. The most common modes of transporting raw materials, goods, and inventories to be compared in this analysis are air, water, rail and road/couriers. Each area contains macro environmental factors, financial scenarios, and catalyst that can regulate and define its individual behaviors. Several companies are comparable underneath the belt of the transportation industry. There are thousands of private businesses operating under this industry; some obviously yield higher revenues than others. (See Table) Every year more equipment is being manufactured for air, rail, road, and water transportation; evidence of a demand surplus of equipment for a growing industry. (See Table) According to Companies Sectors Industries Market, the transportation sector has grown in revenue and income, 3.44% and 2.25%, respectively since the previous quarter. Below are some of the financial ratios the industry has established for the recent quarter.
Debt to Equity Ratio = 0.17
Quick Ratio = 0.73
Return on equity = 9.89 %,
Industry Leverage Ratio (Total liabilities to Equity) = 0.91
The Transportation Industry repaid -0.1 % of debt outstanding from previous quarter, which provides a Debt to Equity Ratio of 0.17, but in this case is below industry average. Gross margin contracted to 62.26 % in Q4. Quarter 4 has increased to 62.87 % from the previous quarter; which positions the transportation industry now to a ranking of #11 in gross margins. Net margin for Transport & Logistics Industry is 4.38 % and below industry average. Overall the industry has started to slope off from the steady growing pace but still has moved up in rank from #76 to #35. With a big regression in revenue seen here in Q4 of 2012, revenue has been steadily decreasing since then. Q3, the decrease shows a heavy reduction in Q4, given 3.97% and 2.66% respectively (CISMarket, 2014).
Macro environmental factors
PESTEL Factors Analysis
Political Factors The commercial transportation industry has many political factors. Political factors relate to government intervention. Specifically, the airline and railroad industries are the two of the industries in which political factors are the easiest to identify. In the airline industry numerous regulations exist; most to protect and favor the airline passengers. Passenger safety is the main concern involving these regulations. Regulations also exist to deter monopolies in the airline industry, thus giving passengers the upper hand in choosing low prices and high amenities. In the railroad industry many political factors also exist. In the 1960s car ownership increased, railways decreased, and many even closed. The government chose to keep some railways open in hopes to decrease the amount of traffic across the…