• Delivery Masters stocks represent companies with strong competitive moats from asset ownership.
• Fleet ownership creates high barriers to entry, protecting market share in logistics.
• Supply chain resilience through owned assets allows for premium pricing and stable demand.
• Investing in Delivery Masters offers portfolio exposure to essential global trade flows.

Why Owning the Lorries Still Matters in a Digital World

I remember a time, not so long ago, when the cleverest people in the room would tell you that owning things was for fools. The future, they insisted, was asset-light. Why own a fleet of lorries when you could build an app to book space on someone else’s? It all sounded terribly modern and efficient, right up until the moment the world needed a roll of toilet paper and discovered there were no lorries to be had.

That, to me, was the great unravelling. The pandemic, for all its horrors, served as a brutal lesson in basic economics. It turns out that when the proverbial hits the fan, the person who owns the fan is king. The companies that owned the trucks, the ships, and the planes didn't just weather the storm, they effectively became the storm.

The Great Asset-Light Fallacy

For years, business schools have preached the gospel of the asset-light model. Less capital tied up, more flexibility, higher returns on equity. It’s a lovely theory that works beautifully on a spreadsheet. In the real world of grit, diesel, and deadlines, however, it can be a catastrophic liability. Relying on others for your transport is like renting a house. It’s fine until the landlord decides to sell, double the rent, or simply kick you out.

Companies that own their fleets, on the other hand, are the landlords. They control their own destiny. When supply chains seized up, businesses like UPS and FedEx weren’t desperately ringing around for a spare van. They were the ones fielding the calls, able to name their price because they owned the physical capacity. This isn’t just about having vehicles, it’s about commanding the very arteries of global commerce.

A Fortress Built of Steel and Rubber

What the asset-heavy transport giants have built is something incredibly rare in the modern economy: a genuine, old-fashioned competitive moat. You can’t simply code a global shipping network into existence over a weekend. It takes billions in capital, decades of navigating mind-numbing regulation, and the kind of operational expertise that can only be learned through trial and error.

Think about what it would take to challenge an established player. You’d need a war chest of cash, a tolerance for wafer-thin margins for the first decade, and the patience of a saint. Meanwhile, the incumbents are enjoying economies of scale that make their services cheaper and more efficient with every parcel they deliver. Technology helps, of course, but it enhances the value of these physical assets, it doesn't replace them. An AI can plot the most efficient route in the world, but it can’t conjure a 40-tonne truck out of thin air.

The Pragmatic Investor’s View

Now, I’m not suggesting this is a risk-free proposition. Far from it. Owning a massive fleet comes with its own set of colossal headaches. Fuel prices can decimate profits. Labour unions can hold you to ransom. And a sharp economic downturn can leave you with a very expensive, very empty fleet of vehicles sitting idle. These are capital-intensive businesses, and they carry the burdens that come with it.

Investing in this space requires a stomach for these cycles. Yet, the resilience they offer is compelling. Essential goods always need to move, providing a baseline of demand that many industries would kill for. For those interested in exploring the companies that dominate this physical world, a curated basket like The Delivery Masters could be a useful place to begin one's own research. It’s a way to look at the theme without trying to pick the one winner from a field of giants. But remember, even giants can stumble, and past performance is never a guide to the future.

Deep Dive

Market & Opportunity

• Companies that own their transportation assets (trucks, ships, planes) have greater control over supply chains.
• Asset ownership creates significant barriers to entry for new competitors due to high capital requirements and the need for operational expertise.
• Recent supply chain disruptions have increased the value of guaranteed transportation capacity, with businesses willing to pay a premium for reliability.
• The "Delivery Masters" theme on Nemo includes 15 selected fleet-operating businesses.
• Less-than-truckload (LTL) carriers have strong competitive moats due to the massive infrastructure investment required for their terminal networks.

Key Companies

• United Parcel Service, Inc. (UPS): A fleet-owning business that controls its transportation assets, providing an advantage during supply chain disruptions. The company has invested heavily in AI and automation to enhance the productivity of its assets.
• FedEx Corporation (FDX): A company that owns its fleet, allowing it to control its operations and thrive during periods of limited transportation capacity. It uses technology like AI to make its owned assets more efficient.
• Old Dominion Freight Line Inc. (ODFL): A less-than-truckload (LTL) carrier with an intricate network of terminals for freight consolidation. Its business model requires massive infrastructure investments, creating a strong competitive advantage and pricing power.

Primary Risk Factors

• Significant operational expenses from fuel costs can negatively impact margins during price increases.
• Regulatory changes, particularly environmental rules, could require expensive fleet upgrades.
• Labor relations challenges and shortages of drivers or ship crews can constrain growth.
• High fixed costs associated with asset ownership can amplify losses during economic recessions.
• Emerging technologies like autonomous vehicles could erode the competitive advantages of traditional asset-heavy models over time.

Growth Catalysts

• The shift in business priorities from cost savings to supply chain reliability benefits asset-owning companies.
• Technology like AI and route optimization enhances the efficiency and productivity of existing fleets.
• The trend of nearshoring and regionalizing supply chains favors companies with established domestic transportation networks.
• Continued growth in e-commerce drives demand for last-mile delivery services, where asset ownership is an advantage.
• The increasing complexity of modern supply chains favors integrated providers who control multiple modes of transportation.

Investment Access

• The "Delivery Masters" basket is available on the Nemo platform.
• The platform is regulated by the ADGM.
• Investments can be made through fractional shares starting from $1.
• The platform offers commission-free investing and AI-driven insights.