Kuehne + Nagel, the world’s second-largest logistics provider, said on Tuesday that a huge increase in air and ocean shipments had propelled profits to new highs in the second quarter.
The company generated 605 million Swiss francs (CHF) ($ 623 million) in pre-tax profit, more than double the performance of last year for the quarter, thanks to a 48% increase in its net revenues . First half profit before tax and interest increased nearly 150% to $ 1.1 billion.
The results reflect the growing demand since the end of the pandemic recession last summer for international freight transportation and third-party freight managers who have the expertise and bulk capacity agreements with carriers to move shipments in the face of challenges. widespread supply chain disruptions.
Importers and exporters wait months to receive shipments due to delays at factories and ports, shortages of marine equipment and various events that temporarily slow productivity.
Kuehne + Nagel (CXE: KNIN), the largest shipping wholesaler, said container volumes in the second quarter increased 3% year-on-year to 2.2 million twenty-foot equivalent units. Revenue increased 70% to $ 2.9 billion.
The third-party logistics provider became the world’s largest air freight forwarder with the $ 1.1 billion acquisition of Hong Kong-based Apex Logistics in May. In 2020, Apex ranked seventh in air cargo volume handled, with a particular focus on Trans-Pacific and Intra-Asian trade routes. On July 1, K + N sold a 24.9% stake in subsidiary Apex to Partners Group. The private equity firm will provide resources to help K + N seek new growth opportunities at Apex, including establishing new freight forwarding routes, identifying new growth verticals such as health care and mergers and acquisitions.
Air cargo volume at K + N climbed 76% in the second quarter, with net sales up 70% to $ 2.4 billion. During the first half of the year, volumes increased 44% to 1.1 million tonnes. Air freight rates are significantly higher than last year due to a capacity deficit of 10 to 20% in a context of still strong maritime demand, helping to increase the margins of airlines and logistics providers.
K + N has been able to attract more air shippers with personalized products such as its combined sea-air service in which sea freight is transhipped to an airliner at an intermediate hub such as Dubai. Among the main products transported by air were pharmaceuticals and electronic commerce. The company said it recorded strong market share gains.
K + N managed a significant increase in truck volume, aided by a strong acquisition of customers for LTL service in Europe.
The contract logistics division lost revenue in the first half of the year because the company divested a large part of its UK portfolio, but acquired new pharmaceutical and e-commerce customers around the world. Warehouse operations opened several highly automated facilities, including new distribution centers for the semiconductor and consumer goods industries.
Earlier this month, K + N agreed to acquire Salmosped AS, an Oslo, Norway-based freight forwarder specializing in seafood transportation. Last year it generated $ 121.5 million net income and processed approximately 69,000 tonnes of cargo. K + N has a large perishable products business and the acquisition of Salmosped complements its seafood operations in Halifax and Vancouver, Canada; London; and Santiago, Chile.
The acquisition is expected to increase K + N’s air shipments.
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