Policy ripple effects are being felt across other industries, too. While the energy efficiency of rail haulage has been helping to shift cargo from lorries to rails, railways are now also benefiting from increased regulation of the trucking industry in the US. The US Department of Transportation has imposed tougher work rules for truck drivers (shorter hours, more rest breaks) and has tightened up on driver qualifications, causing a severe driver shortage. This is likely to lead to increased lorry operator costs, and hence pricing.
As the world becomes increasingly globalised, policy mandates will become more broad-brushed and impactful. There is growing evidence that this trend is expanding from the global automotive industry into other areas. Energy efficiency has been a common thread, but investors should look beyond the more obvious angles, aiming to capture more, as yet unrecognised, opportunities.
Max Burns is global equity research analyst at Sarasin & Partners
