Stock Market Performance of Key Passenger and Freight Transport Companies, 2000-2006
A significant difference between the stock market performance of passenger and freight transport companies is observed (dividends are excluded). While passenger companies have seen a significant drop in their shares' value between 2000 and 2006, the share value of freight companies has more than doubled. One of the best performing car manufacturer, Toyota, saw a modest 6.5% increase during the 2000-2006 period, not even compensating for inflation. While the American passenger transportation market has attained a phase of maturity, is highly competitive and undermined by "legacy costs" (benefits for current and retired employees), globalization and the relocation of many manufacturing activities to other locations has favored a surge in demand for freight distribution in the United States. The corporations involved in such activities have consequently experienced a substantial growth of their valuation. Freight companies, especially railways, tend to be more asset based and a growth in the level of use of these assets is linked with increasing returns.