A Study of Oil Price and Other Contributing Factors to the Profitability of Courier Companies

Abstract

Oil, being a major commercial energy source in the world, its fluctuation is often interrelated with the global economy. Generally, people would perceived that earning power of transportation sectors which include airline companies, courier companies and shipping companies are heavily relied on oil price fluctuation. Apparently, oil seems to be the major operating expense for those companies. As oil price goes down, it is naturally assumed that transportation industry is doing well as their operating expense is low and vice versa. This study has focused on the issue of whether the profitability of courier companies are wholly dependent on oil price. Comparison was done between four courier companies, namely Pos Malaysia, TNT Express, United Parcel Service and Deutsche Post. The data analyzed were the oil price and the net profit of each courier company from year 2006 to 2014. Simple linear regression and t-test analysis was done. The results showed that only linear relationship between oil price and net profit was exhibited by TNT Express. This means that the net profit of other three companies including Pos Malaysia, United Parcel Service and Deutsche Post are not mainly affected by oil price.