Kuehne + Nagel grows despite ‘stagnating’ air market

In what it called a “stagnating airfreight market,” Switzerland-based freight forwarder and logistics services provider Kuehne + Nagel (K+N) has managed to grow airfreight volume by 5.1 percent, year-over-year, in the first nine-months of 2015.

From the period of Dec. 31, 2014 through Sept. 30 of this year, K+N’s operating income (EBIT) for the airfreight division rose by 11 percent, year-over-year, to reach nearly US$213 million. The company cited increasing demand for specialized services in industries such as automobile parts, pharmaceuticals, aerospace and perishable goods as contributors to its air cargo success, along with good performances in Asia, Europe and North America. In spite of negative currency effects of 7.5 percent, K+N’s group-wide earnings for the period increased by 6.7 percent to $539 million. One sour note was the performance of K+N’s contract logistics segment, which saw EBIT decline by 19.6 percent, y-o-y, to $90 million for the period. K+N said its logistics business gained new contracts in automotive, high-tech, pharmaceuticals and consumer goods, but these were offset by the restructuring of other projects in the U.K., along with negative currency effects.

Regarding the other segments, K+N said growth in the U.S. import market for seafreight from Europe and Asia compensated for weak exports from Asia to Europe, leading to an 11.7 percent, y-o-y, growth in the ocean sector EBIT to $352 million  In its overland business, the company reported EBIT of nearly $18 million, a 5.6 percent dip, y-o-y. Net turnover in overland business declined by 12.1 percent due to the discontinuation of project business and lower rates as a result of falling diesel prices, which K+N passed on to the customer. Kuehne + Nagel said the recent acquisition of ReTrans, a U.S.- based provider of multimodal transportation management services, should strengthen its market position as an integrated logistics provider in North America going forward.

“In the third quarter we further improved our results, especially in seafreight and airfreight,” said Detlef Trefzger, CEO. “The development in overland is solid, and the optimization of selective projects in contract logistics is proceeding as planned. The performance in the first nine months confirms our market strategy and we see our group on the right track.”

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