Li & Fung forwarding revenues down in H1 2016, contract logistics and e-fulfilment up

Li & Fung’s Logistics division reported that revenue fell by 10.5% in H1 2016 year-on-year to $425m. Falling freight rates and unfavourable currency movements hindered growth, though the company noted that it had increased business from new and existing customers.

In particular, according to Li & Fung, “in-country logistics maintained strong organic growth with customer wins and geographical expansion.” The company also noted its e-logistics piece-picking business expanded by double digits on the back of e-commerce growth in China and Asia.

The Logistics division’s ‘total margin’ improved by 14.6% to $148m thanks to a “better customer mix, more efficient freight procurement, and increased sales of value-added services in our global freight management business.”

Also of note was that Logistics became considerably more exposed to Asia, just 12% of segment revenue was derived from outside the region compared to 23% in H1 2015. That was on the back of Rest of the World revenues falling by 54.6%, while China and Rest of Asia turnover grew by -0.7% and 9.3% respectively.

Finally, some operational highlights of the first half included expansion into South Korea and Japan, as well as the inauguration of a new distribution hub in Singapore.

Source: Li & Fung