Pathway to Value Creation

To unlock growth and profitability in a challenging sector, transportation and logistics companies need to make bolder and more astute strategic choices than ever before.

The sector’s checkered history of value creation is counterbalanced by compelling lessons from successful players in a range of transportation and logistics industries, both pre- and post-crisis.

For all of the upheaval facing the sector, a number of powerful megatrends will create unprecedented opportunities to enter new markets and redefine existing business models.

The asset intensity and geographic breadth of transportation and logistics companies will reward granular fact-based decisions about the markets in which to play, city by city, route by route.

This is an opportune moment for executives in the sector to challenge whether their strategy will meet and outperform market expectations.

The authors of this report draw on proprietary macroeconomic and sector-specific research, supported by “big data”-enabled analytical techniques from McKinsey’s global center of excellence in strategy and corporate finance.

We adopt a financial investor perspective by taking an in-depth look at the capital market performance of 264 listed transportation and logistics companies from around the world over a period of ten years.

The findings provide fact-based insights into the drivers of value creation, both before and after the economic crisis, across eight industries that comprise the sector: airline, bus, freight forwarding, postal/CEP (courier, express, and parcel), rail, shipping, trucking, and contract logistics.

Key Findings

• The through-cycle capital market performance of the transportation and logistics sector is below investors’ requirements.
• Even in the worst-performing industries, successful players provide valuable lessons for those seeking a pathway to economic profitability.
• Improving ROIC is the key to overcoming investor skepticism about the sector and increasing valuations.
• Winning strategies will make the most of seven megatrends that are shaping the transportation and logistics sector.