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The Trader's Playbook: One Unique Way To Play The Cyber Threat Trend

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The Trader's Playbook: One Unique Way To Play The Cyber Threat Trend

As ransomware attacks affect A.P. Moller - Maersk A/S (OTC: AMKBY) container shipping business (the second largest in the world) and FedEx Corporation (NYSE: FDX), Bernstein analyst David Vernon sees an opportunity to capitalize on the trend.

“Details on these events remain unclear, but these disruptions will in our view create demand for expedited services leading to stronger air freight and expedited trucking rates and increased costs for brokers,” Vernon noted.

Be Bullish On Air Cargo Rates

Vernon highlighted how Maersk is currently unable to take bookings and “orders will queue and roll pools will expand to the point where terminals reject cargo.”

“Shippers will look to rebook on other lines, who will charge more for any capacity left available and fill their roll pools with lower rent containers. Freight that cannot be accommodated or has been delayed will be diverted to air, leading to higher air cargo rates.”

As this goes on, the demand for expedited transportation services will increase especially for air cargo rates.

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FedEx Should Expect To See Revenue Loss From TNT Express

Vernon noted the attack might have compromised TNT Express' remit advanced shipping data, and this could lead to a loss of revenue. However, he had some good news for FedEx as “this may accelerate some diversion from TNT to FedEx services and the company as a whole should have leverage to better air cargo pricing.”

Related Links:

Ransomware Rears Its Head Again As 150 Countries Hit By New Virus

FedEx Subsidiary TNT Express Hit By Second System Virus In 2 Months

Latest Ratings for FDX

DateFirmActionFromTo
May 2021Wolfe ResearchUpgradesPeer PerformOutperform
Apr 2021BerenbergMaintainsBuy
Apr 2021KeybancUpgradesSector WeightOverweight

View More Analyst Ratings for FDX
View the Latest Analyst Ratings

 

Related Articles (FDX + AMKBY)

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