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Archive of posts published in the category: Sector
Jun
23

Transportation Sector

What Is the Transportation Sector?

The transportation sector is a category of companies that provide services to move people or goods, as well as transportation infrastructure. Technically, transportation is a sub-group of the industrials sector according to the Global Industry Classification Standard (GICS). The transportation sector consists of several industries including air freight and logistics, airlines, marine, road and rail, and transportation infrastructure. These industries are further broken down into the sub-industries air freight and logistics, airlines, marine, railroads, trucking, airport services, highways and rail tracks, and marine ports and services.

Key Takeaways

  • The transportation sector is an important industry sector in the economy that deals with the movement of people and products.
  • These include companies such as airlines, trucking, railroads, shipping, and logistics firms, as well as those that provide transportation infrastructure.
  • The Dow Jones Transportation Index (DJTA) was the U.S.’s first stock market index, and still tracks 20 of the most important companies in the sector.

Understanding the Transportation Sector

The performance of companies in the transportation industry is highly sensitive to fluctuations in company earnings and the price of transportation services. Main factors affecting company earnings include fuel costs, labor costs, demand for services, geopolitical events, and government regulation. Many of these factors are interconnected. For example, if the U.S. government passes regulations that make it more difficult for people to earn their commercial drivers’ license, this will reduce the supply of drivers, driving up the cost of hiring drivers.

Oil prices are a key factor for transportation, as the commodity’s price generally has an influence on transportation expenses. Gas and fuel prices that rise will increase costs for a trucking company, eating into their profit and potentially reducing their stock price.

Energy costs and the value of transportation stocks are certainly interrelated. Low energy costs may become a factor in boosting the share price of various transportation companies, but the influence can also be reversed. When demand for transportation services is high the impact will be reflected in quarterly reports of transportation companies. This information may, once disseminated, may motivate energy traders to bid up prices for oil and similar commodities. However, if demand for commercial transportation falls, this information could lead to a decline in oil prices as well.

Investing in the Transportation Sector

You can invest in companies that move people and products by buying shares of individual transportation companies, or through sector-specific mutual funds or exchange-traded funds (ETFs) that specialize in the transportation sector. The transportation sector is one of the most broadly diversified with industrial companies representing airlines, railroads, truckers, equipment and leasing stocks, and logistics companies. Funds that track this sector will track a benchmark sector index like the DJTA.

The Dow Jones Transportation Index

The Dow Jones Transportation Average (DJTA) is a price-weighted average of 20 transportation stocks traded in the United States. The DJTA is, in fact, the oldest U.S. stock index, first compiled in 1884 by Charles Dow, co-founder of Dow Jones & Company. The index initially consisted

Apr
15

Nigeria’s transportation sector: Adaptation to COVID-19 and way forward.

The unprecedented impacts and disruptions as a result of coronavirus known popularly as COVID-19 is affecting all economies and markets globally.

It is caused by the SARS -COV-2 and has continued to grow with more than 175 countries and territories reporting cases. There are currently 1,604,718 global confirmed cases and 95,735 deaths from COVID-19 outbreak as of April 10,2020,03.37GMT and 305 confirmed cases and 7 deaths in Nigeria.

Sub for 500

The response by governments and organisations all over the world has suddenly impacted our way of life and that of the global transportation systems. The speed with which these impacts has hit the world is unprecedented, especially because the different modes of transport (airlines, railways, maritime, pipelines, private and public transport systems) have all experienced drastic fall of customers and patronage.

This has resulted negatively in shutting down of operations and in many cases reduction in service delivery levels which has thrown nations and the entire transport systems into the worst case ever experienced by mankind, worse than the similar case of 1918 influenza pandemic caused by an H1N1 virus with genes of avian origin.

Though, COVID-19 pandemic has negatively dislocated and shutdown industries and economies, there seems to be some unique opportunities attached to it, such as helping the sector to reposition itself to be broader in business approach and seamless. Before the outbreak of the virus, Nigerian economy had great potentials for growth, it is currently the largest in Africa with a gross domestic product (GDP) of $446.543 billion (2019).

The lack of a well-diversified economy and weak healthcare system  is a great challenge that might affect the economy of Nigeria if urgent steps are not taken in addition to the International Monetary Fund (IMF) revision of the 2020 GDP growth rate from 2.5 percent to 2 percent as a result of a relatively low oil price and limited fiscal space.

Additionally, the country’s debt profile had been a source of concern for policymakers and developmental practitioners, as the most recent estimate puts the debt service-to-revenue ratio at 60 percent, which is likely to worsen amid the steep decline in revenue associated with falling oil prices. These constraining factors will aggravate the economic impact of the COVID-19 outbreak and make it more difficult for the government to manage the crisis.

Transportation sector contribution to Nigeria’s GDP increased to $720.241 million in the third quarter of 2019 from $642.927 million in the second quarter of 2019 and contributed 2.49 percent to nominal GDP in Q1 2019, an increase from 1.85 percent recorded in the corresponding period of 2018, higher than 2.05 percent recorded in the fourth quarter of 2018.

The importance of the sector as the gateway to the economy of nations cannot be overemphasised, especially because transportation is an essential service  needed all over the world to move passengers, goods and services with safety and security as its fundamental objective in delivering quality service and also a top priority for the government (the regulators) to ensure everyone working in the

Apr
6

Transportation Systems Sector | CISA

A train passes by a busy highwayThe Department of Homeland Security and the Department of Transportation are designated as the Co-Sector-Specific Agencies for the Transportation Systems Sector. The nation’s transportation system quickly, safely, and securely moves people and goods through the country and overseas.

Sector Overview

The Transportation Systems Sector consists of seven key subsectors, or modes:

  • Aviation includes aircraft, air traffic control systems, and about 19,700 airports, heliports, and landing strips. Approximately 500 provide commercial aviation services at civil and joint-use military airports, heliports, and sea plane bases.  In addition, the aviation mode includes commercial and recreational aircraft (manned and unmanned) and a wide-variety of support services, such as aircraft repair stations, fueling facilities, navigation aids, and flight schools.
  • Highway and Motor Carrier encompasses more than 4 million miles of roadway, more than 600,000 bridges, and more than 350 tunnels. Vehicles include trucks, including those carrying hazardous materials; other commercial vehicles, including commercial motorcoaches and school buses; vehicle and driver licensing systems; traffic management systems; and cyber systems used for operational management.
  • Maritime Transportation System consists of about 95,000 miles of coastline, 361 ports, more than 25,000 miles of waterways, and intermodal landside connections that allow the various modes of transportation to move people and goods to, from, and on the water.
  • Mass Transit and Passenger Rail includes terminals, operational systems, and supporting infrastructure for passenger services by transit buses, trolleybuses, monorail, heavy rail—also known as subways or metros—light rail, passenger rail, and vanpool/rideshare. Public transportation and passenger rail operations provided an estimated 10.8 billion passenger trips in 2014.
  • Pipeline Systems consist of more than 2.5 million miles of pipelines spanning the country and carrying nearly all of the nation’s natural gas and about 65 percent of hazardous liquids, as well as various chemicals. Above-ground assets, such as compressor stations and pumping stations, are also included.
  • Freight Rail consists of seven major carriers, hundreds of smaller railroads, over 138,000 miles of active railroad, over 1.33 million freight cars, and approximately 20,000 locomotives. An estimated 12,000 trains operate daily. The Department of Defense has designated 30,000 miles of track and structure as critical to mobilization and resupply of U.S. forces.
  • Postal and Shipping moves about 720 million letters and packages each day and includes large integrated carriers, regional and local courier services, mail services, mail management firms, and chartered and delivery services.

Sector-Specific Plan

The Transportation Systems Sector-Specific Plan details how the National Infrastructure Protection Plan risk management framework is implemented within the context of the unique characteristics and risk landscape of the sector. Each Sector-Specific Agency develops a sector-specific plan through a coordinated effort involving its public and private sector partners. The Postal and Shipping Sector was consolidated within the Transportation Systems Sector in 2013 under Presidential Policy Directive 21. The Department of Homeland Security and the Department of Transportation are designated as the Co-Sector-Specific Agencies for the Transportation Systems Sector.

Transportation Systems Sector Activities Progress Report

As Co-Sector-Specific Agencies (Co-SSAs) for the Transportation Systems Sector, DHS—with TSA and the USCG as its executive agents—and