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October 29 2018

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October 29 2018 | The Journal of Commerce 29 Top Global Transportation Providers Cover Story Special Report growth at Canada's two major rail- roads was also robust: Canadian Na- tional at 12.3 percent, and Canadian Pacifi c at 9 percent. Revenue growth at the remaining Class 1 railroads in North America was slower — at CSX, up 3.1 percent, and Norfolk South- ern, up 6.7 percent. This year, as in the past, D'Amico said, "Rail haul volumes are going to be a good indicator of the strength of the economy." Of the global third-party logistics companies, XPO Logistics, one of the fastest-growing, slowed its pace of revenue growth to 5.2 percent in 2017. XPO has not made any acquisi- tions since its purchase of Con-way in October 2015, as it continues to integrate its multiple acquisitions of past years into its corporate strategy, D'Amico noted. XPO Logistics, with $15.3 billion revenue, is ranked third among third-party logistics providers on this year's Top 50 list of transportation service companies, after Germany-based DB Schenker and Switzerland's Kuhne + Nagel. As in the past, there isn't a lot of trucking companies on the Top 50 list for 2017, D'Amico said. The biggest less-than-truckload carrier in the United States is FedEx Freight, whose volumes are counted in the FedEx total. Parcel giants UPS and FedEx continue to be ranked fi rst and second on the 2017 Top 50 list, D'Amico said, because "these are very asset-intensive businesses, so there are tremendous barriers to entry." The only stand-alone trucking operator on the list is YRC, ranked No. 45. J.B. Hunt, which ranks 32nd on the list and generates most of its revenue through intermodal tra c, enjoyed year-over-year revenue growth of 9.7 percent. The great ma- jority of truckload companies remain small companies, D'Amico said. He noted there are only two truckload companies on this list — Schneider, ranked 48th, and Knight- Swift, ranked No. 42. E-commerce remained a very strong area for growth in 2017, and the three biggest companies on the list — UPS, FedEx, and DHL — were all involved in the fast-growing parcel sector — including in the Chi- nese market, which has emerged as the world's largest for e-commerce parcel deliveries. a decline of 2.6 percent in 2016. Tai- wan-based Evergreen Group's revenue sprang back 24.3 percent, after slump- ing 10.9 percent the year before. Other growth companies includ- ed South Korea's HMM, up 18.4 per- cent year over year; OOCL of Hong Kong, up 15.3 percent; MOL, based in Japan and now part of Ocean Network Express, up 11.6 percent; and Yang Ming of Taiwan, which saw revenue jump 18.7 percent in 2017. The revenue fi gures for six of the Top 50 transportation service companies refl ect a major impact from merger and acquisition ac- tivities. FedEx, the second-largest global parcel company, enjoyed revenue growth of 12.9 percent, in part because of the integration of its acquisition of TNT Express, acquired in May 2016. Other notable mergers that had an impact on revenue were CMA CGM's acquisition of Neptune Orient Lines in September 2016, and NYK Group's acquisition of Yusen Logistics' remaining outstanding shares in November 2017, which will be refl ected in 2018 revenue fi gures. When it comes to organic growth, the state-owned railroads of three of the world's largest countries — China, India, and Russia — all registered strong numbers. China Railway, the largest of the three rail companies, recorded year-over-year revenue growth of 21.4 percent. Russian Railways, the second-largest of the three, recorded growth of 22.2 percent. India Railways, the smallest among them, recorded revenue growth of 12.7 percent. Railroads make mark In all, fi ve of the 15 largest companies on the Top 50 list were railroads, including Burlington Northern Santa Fe and Union Pacifi c in the United States, which grew at a healthy but somewhat slower pace of 10.9 percent and 6.5 percent, respectively. Year-over-year revenue TRANSPORTATION SERVICE provid- ers have enjoyed strong growth in revenue in the last year. The latest analysis conducted for The Journal of Commerce by SJ Consulting Group shows all of the companies on the Top 50 transportation service providers list grew revenue in 2017. Only about a dozen of the Top 50 companies in 2016 registered growth in revenue. The Top 50 companies generat- ed aggregate earnings of $750.296 billion in 2017, up 11.5 percent year over year. Mark D'Amico, senior analyst at SJ Consulting Group, attributed the strong growth to higher ship- ment volumes and improved rates resulting from tighter capacity from strong shipper demand. Revenue growth ranged from a 32.2 percent increase in the case of France-based CMA CGM, to 0.7 percent for Japan's Sagawa Express (SG Holdings Group), an integrated provider of logistics services — including express delivery — whose growth numbers in dollars refl ected the adverse impact of a decline in the value of the Japanese yen. On a constant currency basis, Sagawa earnings were up 4.0 percent. The major ocean carriers worldwide recorded higher revenue in 2017 as a result of tightening capacity, which led to higher freight rates. Close on the heels of CMA CGM, Germany-based Hapag-Lloyd charted the second-fastest growth rate, at 31.6 percent. Switzerland's Mediterranean Shipping (MSC) enjoyed a robust expansion of 21.7 percent. At Denmark-based Maersk Line, revenue expanded at a more modest pace of 5.6 percent, despite its acquisition of Hamburg Sud in November 2017. Double digits in Asia Several Asia-based carriers enjoyed double-digit growth. Revenue grew 27.2 percent at China's Cosco after All Top 50 companies enjoy gains in revenue with economy ripe for growth By Alan M. Field XPO Logistics, with $15.3 billion revenue, is ranked third among third- party logistics providers on this year's Top 50 list of transportation service companies. XPO Logistics

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