Kuehne+Nagel suffers in more difficult markets

Kuehne+Nagel

The past half-year has been painful for Kuehne+Nagel. The Swiss based logistics service provider suffered a year-on-year fall in gross profit of 8%, of Earnings Before Interest and Tax (EBIT) of 32% and of net earnings of 33%. The results for the second quarter were better but not by much.

Unsurprisingly the main source of pain has been the sea freight forwarding business. Over the half year, gross profit fell by 22% and EBIT by 38%. This was despite volumes recovering strongly over the period. EBIT per TEU edged down to CHF182 however Kuhne+Nagel pointed out that this rate was still higher than the average rate between 2014 and 2019, which was CHF102.

The situation in air freight forwarding was not as bad but neither was it good. For the half-year, gross profit fell by 12% and EBIT by 28%. Volumes were up by 5% but EBIT/Kg has fallen to levels last seen in 2014-2019. Kuehne+Nagel said that they were sustaining their market share however this seemed to exclude e-commerce, with profitable business driven by “Healthcare and Semicon”.  They did say that “Sea-Air Logistics services recorded strong growth in the first half of 2024 as some customers sought to shorten transit times due to the situation in the Red Sea”.

Road freight also had a hard time, with EBIT down 29% for the half year, despite volumes being flat. Contract logistics was nearly the exception, with EBIT just falling by 5% over the half year and rising by 4% in the second quarter.

The trajectory that Kuehne+Nagel is on is not disastrous. Rather these results for the half-year represent a market that is more difficult for forwarders than that of 2023. Knowing what the future holds for Kuehne+Nagel is difficult, in great part because of the volatility of freight markets. If the situation in the Red Sea improves it may change Kuehne+Nagels position substantially. However, at present the company’s competitiveness has deteriorated.

Author: Thomas Cullen

Source: Ti

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