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J.B. Hunt Transport Services ranks among the top surface transportation companies in North America by revenue. Its primary operating segments are intermodal delivery, which uses the Class I rail carriers for the underlying line-haul movement of its owned containers (48% of sales in 2023), dedicated trucking services that provide customer-specific fleet needs (28%), for-hire truckload (6%), heavy goods final-mile delivery (7%), and asset-light truck brokerage (11%).

Hub Group ranks among the largest providers of rail intermodal service. Roughly 60% of revenue comes from Hub's intermodal and transportation solutions division. ITS includes its flagship intermodal operations, which use the Class I rail carriers for the underlying line-haul movement of containers, as well as its dedicated truckload shipping unit. Hub's logistics segment includes its asset light truck brokerage operations, along with its outsourced transportation management, warehousing and fulfillment, and heavy-goods final mile delivery offerings. Hub is somewhat acquisitive in that it often makes tuck-in acquisitions which expand its brokerage, last-mile, and dedicated offerings.

Wesco International is an industrial distributor that has three reportable segments, electrical and electronic solutions, communications and security solutions, and utility and broadband solutions. The company offers more than 1.5 million products to its 140,000 active customers through a distribution network of 800 branches, warehouses, and sales offices, including 43 distribution centers. Wesco generates approximately 74% of its sales in the United States, but it has a global reach, with operations in 50 other countries.

The transportation and supply-chain industry is rarely noticed, unless something goes wrong. The sector exists to move goods from producers to consumers, and there is a direct relationship between consumer demand and the amount of freight transported. In the early days of COVID-19, consumer demand plummeted. After the pandemic, many workers stayed home from the office, but shifted spending patterns towards experiences, leading to a downturn in shipping demand once again. While the supply chain has begun to normalize, it remains out of balance. According to the U.S. Department of Transportation's Bureau of Transportation Statistics, the U.S. transportation system moved an average daily 55.2 million tons of freight valued at more than $54 billion. Excluding materials moved by pipeline, estimated annual freight moved in the U.S. will be approximately 16.4 billion tons. The majority of this freight is moved by truck. The transportation and supply-chain industry accounts for almost 2% of the S&P 1500 market capitalization and just over 2% of the revenue generated by companies in the index. The largest 20 companies by market capitalization collectively generated revenues of almost $410 billion in 2023. We expect challenging market conditions - including rising labor costs and lower volume - to persist for the next two or three quarters. But as the economy recovers from high inflation and deglobalization, we see U.S. companies looking to strengthen their domestic supply chains. The recently passed bipartisan infrastructure spending plan also holds promise.