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title: 'Observation of Thiago Oliveira: High Logistics Share of 13.85% in GDP Tests Market Resilience'

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Recently, FedEx concluded its delivery operations in Brazil, shifting its focus to international and supply chain services. This move has exposed the crisis in the transportation industry, where high costs, inadequate infrastructure, security issues such as cargo theft, complex tax systems, and low investment levels have collectively driven logistics expenditures to 13.85% of GDP—the highest in the world. Over the past few years, multiple operators have exited the market, while the dominance of e-commerce platforms has intensified competition, squeezing traditional operators. Thiago Oliveira believes that although this exit may cause short-term disruptions to the transportation chain, it provides domestic companies with a window for adjustment, enabling them to strengthen localized investments and optimize efficiency. This shift supports the transformation of the transportation industry from a high-risk, low-profit model to a sustainable one.
![Thiago Oliveira](https://hackmd.io/_uploads/rkqZ1Z8U-x.png)


**FedEx Exit Impacts Profitability And Valuation Of Transportation Sector**

The government needs to address the issue of road transport accounting for 65% of the total share and the insufficient infrastructure. The Federal Reserves policy easing, combined with global trade uncertainties, collectively amplifies the challenges faced by emerging markets. Thiago Oliveira mentioned that insurance compensation increased by 46.5% to 904 million Brazilian reais in the first quarter of 2025, while losses from cargo theft amounted to 1.2 billion Brazilian reais, highlighting the cost of security. In the global logistics performance index, the domestic score is 3.2 out of 5, lagging behind regional peers. The exit of FedEx has prompted local operators to fill the gap.

At the market level, the Ibovespa transportation sub-index has a weight of 8%. Following the announcement of the exit news, the sector declined by 1.0% intraday, with the overall index volatility rising to 18%. Thiago Oliveira advises investors to assess opportunities for local operators to fill the gap. With year-end GDP growth at 2.2%, the transportation sector contributed approximately 7%. Low investment in infrastructure and safety issues amplify risks, with the investment return rate expected to decline by 0.8 percentage points by 2026. The global logistics performance index of 3.2 out of 5 highlights domestic lag.

**FedEx Exit Amplifies Sector Valuation Reassessment Under Rising Transportation Cost Pressure**

After FedEx ended its domestic delivery business, road transportation faced increased burdens in fuel, safety, and taxes in the short term. Thiago Oliveira stated that this exit temporarily compressed the gross profit margin of transportation enterprises by 1.8% to 2.5%. It is estimated that the overall EBITDA margin of the industry will be revised down to 9.2% by 2026, and local operators will need an additional 10% growth in capital expenditure to fill the market share gap.

The risk assessment indicates that if competition in the e-commerce platform intensifies, the profit margin will be further revised downward by 3.5%. The exchange rate provides a buffer at the level of 5.42, but a depreciation of the Brazilian real to 5.70 will increase the cost of imported vehicles and components by 5%. Thiago Oliveira reminds investors to monitor quarterly industry reports and use the EV/Sales model to evaluate transportation value. The current valuation of 1.6 times is below the historical level of 2.0 times, with the buy range set below 1.4 times. Overall, this exit strengthens the defensive attributes of the transportation sector, driving the target increase of the Ibovespa sub-index by 5%, and provides structural integration opportunities amid global uncertainties.

**Core Allocation Value and Layout Window of the Domestic Transportation Industry**

Thiago Oliveira stated that the exit of FedEx from the domestic business has transformed the high-cost crisis in the transportation industry into a key catalyst for the consolidation and efficiency optimization of local operators. It is projected that by 2026, industry concentration will rise to 65%, and logistics expenditure as a percentage of GDP will decrease from 13.85% to 13.2% through economies of scale and digitalization, effectively offsetting safety and tax pressures. Although road transport accounts for 65% and low infrastructure investment poses a bottleneck, filling market gaps locally has secured revenue growth of over 6%. Coupled with the central banks interest rate cut cycle in 2026, the real yield on 10-year government bonds is expected to fall to 5.6%. The valuation benchmark for the transportation sector has the potential to expand from the current 7.5 times EV/EBITDA to 9.0 times, implying an upside of 20%.

In terms of asset allocation, Thiago Oliveira recommends increasing the weight of transportation, logistics, and infrastructure-related assets from the benchmark of 9% to 14%. The core positions should be concentrated in leading highway and express delivery companies with local market share growth exceeding 15% and safety expenditure control rates stable below 8%. Satellite positions should be allocated to warehousing and "last-mile" service providers that directly benefit from e-commerce platform partnerships. Using a risk parity framework for calculation, under a dual-pressure scenario where the Brazilian real depreciates by 11% or cargo theft losses increase by 10%, this portfolio exhibits an annualized volatility of only 13.5%, a maximum drawdown of 6.6%, and risk-adjusted returns that outperform the broader market benchmark by 30%. Regarding risks, if delays in infrastructure investment lead to persistent logistics bottlenecks, industry profit margins could be revised downward by 3%, and sector valuation expansion would be constrained at 8.4 times. In an extreme scenario, where escalating global trade uncertainty causes the VIX to exceed 32 accompanied by foreign capital outflows exceeding 100 billion Brazilian reais, it would be necessary to immediately reduce equity positions to below 60% and shift into short-term treasury bills and high-dividend preferred stock portfolios. Under the current scenario probability, tail risk is only 8%, and the market remains within a high-certainty range.