K&N’s Reports a Profit of 78 Percent
THE world’s top forwarder, Kuehne + Nagel, has declared a 78 per cent year-on-year second quarter operating profit increase to US$1.1 billion, drawn on revenues of $10.9 billion, which rose 45 percent.
It was the third consecutive quarter with operating profit in excess of $1 billion as the Swiss company freight networks operated at at full capacity.
Despite a 2.4 per cent fall in seafreight volumes to 1.1 million TEU, K+N ocean revenue increased 76 per cent to $5.2 billion, while quarterly operating profit jumped 97 per cent to $610 million year on year.
The decline in TEUs was less than the five per cent experienced by the overall ocean market. Operating costs are much higher than usual because supply chain disruptions minimise the effectiveness of automated tools and require extensive manual interventions to ensure cargo wasn’t delayed.
Said CEO Detlef Trefzger: “The bottleneck in the market is logistics experts. We have a lot of vacant jobs and we see it’s getting better month over month with our recruiting initiatives and with our industry being more and more attractive, especially for young people who want to grow into a cool industry,” he said.
Led by its ocean and air segments, despite headwinds from Covid lockdowns in China, the invasion of Ukraine, soaring fuel prices, high inflation and port congestion, the company performed well.
K+N moves 65 per cent of shipments on dedicated freighters and only 35 per cent in the lower hold of passenger aircraft, in line with the market’s overall capacity distribution.
Mr Trefzger said the balance isn’t expected to change this year because airlines will dial back peak-season travel offerings for the slower winter season and some major markets, such as China, still don’t allow unrestricted foreign travel, further limiting capacity.
Kuehne + Nagel said trucking volumes increased 12 per cent in revenues yielding a record $83 million operating profit for the January-June period.
Since June, the company has been using biofuel for road transport of Moderna’s Covid vaccines from the production site in Spain to a distribution centre in Belgium, eliminating most carbon dioxide emissions in the process.
Contract logistics revenues increased nine per cent in the second quarter, as the company continued to expand service offerings in the e-commerce and pharmaceutical sectors.
Business in North America and Asia is growing at twice the speed of Europe, and 80 percent of lease commitments are backed by customer contracts. Warehouse utilisation is 98 per cent, meaning buildings are mostly full, said the company in its recent statement.