Forward Air CorporationFWRD

Morningstar Rating

Stock Research and Analysis

by Anthony Dayrit

Forward Air is the leader in the North American deferred air freight market, providing a cost-saving transit service to rapidly growing third-party logistics firms (3PLs), integrated shippers such as FedEx FDX and United Parcel Service UPS, and major Read more

Bulls Say

Forward Air occupies a leading position in an attractive market, providing a cost-saving service for rapidly growing 3PL firms.

The firm's extensive network of airport-to-airport terminals creates a sizable obstacle for prospective competitors, since attempts to match Forward Air's size would be costly without existing freight volume to generate revenue.

Forward Air is careful to avoid marketing its services directly to shippers, thereby preventing competition with its customers such as freight forwarders and integrated shippers.

The company's asset-light business model isn't fully immune to drops in freight demand, but can maintain profitability over economic cycles. Read more

Bears Say

Because it has little geographic or product diversification, Forward Air is principally exposed to the health of the North American economy, which drives demand for deferred air freight.

The firm's asset-light model depends on third-party contractors to execute its core function.

Although replicating Forward Air's operations would be difficult, well-funded firms could do so if they were willing to endure losses while building up their networks.

Owner-operators provide a majority of Forward Air's purchased transportation. A shortage of truck drivers in the U.S. may increase operating expenses as the firm looks to attract quality drivers. Read more

Strategy

Forward Air focuses on efficiently managing its core airport-to-airport deferred air freight network through the cyclical freight market. The company has diversified its services to more fully utilize Read more

Management

Overall, we think Forward Air possesses solid corporate-governance policies. Seven of the eight directors are independent, and the firm does not stagger terms. Executive compensation appears reasonable and perquisites aren't excessive--CEO Bruce Campbell Read more

Profile

Forward Air is an asset-light provider of time-definite truck transportation to the North American deferred air freight shipping market. Airport-to-airport trucking constitutes Read more

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