Kuehne+Nagel, the Swiss logistics firm, reported a 23% decline in operating profit for the second quarter, reflecting sequential improvement. The company attributed this positive shift to increased airfreight demand, which helped offset declines in other sectors. Kuehne+Nagel anticipates stronger profits in the latter half of the year.
In comparison, Danish competitor DSV reported a 12.4% decrease in operating income year-over-year, a notable improvement from the 21% decline reported in the first quarter. The company’s performance was bolstered by volume growth and market share gains across its three business lines.
Kuehne+Nagel’s earnings before interest and taxes fell to 402 million Swiss francs ($451 million), a decrease from the previous year but an improvement from the 39% drop in the first quarter. Revenue for the company was $6.8 billion, down 9% from the second quarter of 2023, though it showed improvement from the negative 18% growth in the first quarter.
The impact of Red Sea shipping diversions was minimal, with the company noting an indirect benefit to its airfreight forwarding business. Seasonal volume increases and a focus on yield management contributed to improved results, and the company expects a rise in ocean container demand and a strong airfreight peak season in the second half of the year.
Kuehne+Nagel’s air cargo revenue rose by 9% to $2 billion in the quarter. Despite a 17% year-over-year drop in operating profit, this was an improvement from the 39% decline in the first quarter. The air logistics division handled over 1.1 million tons in the first half of 2024, a 5% increase from the previous year, with a 7% rise in the second quarter.
The upturn in air cargo volume was largely driven by the company’s subsidiary, Apex Logistics, which capitalized on e-commerce orders from China. Apex’s block space capacity with airlines for the third and fourth quarters is 70% sold out, positioning the company to benefit from holiday shopping season demands.
Kuehne+Nagel’s management expressed cautious optimism about the potential for a robust airfreight peak season in the second half of the year. Demand for hybrid sea-air services between Asia and Europe remained strong as customers sought cost-effective solutions to shorten transit times amid Red Sea shipping challenges.
Ocean shipping revenues declined by 3%, with a 32% drop in operating profit due to increased ocean rates. However, contract logistics saw a slight decline of 1% in revenue compared to the previous year, while operating profit increased by 4%. The company expanded its distribution centers for various clients and continued to grow its presence in key markets.
In early 2024, Kuehne+Nagel acquired Farrow Group, a Canadian customs broker, and announced the planned acquisition of City Zone Express, a Malaysia-based logistics company. These moves are expected to enhance the company’s customs and cross-border logistics capabilities.
DSV, the third-largest global logistics provider, reported a 12% decrease in earnings before interest and taxes to 4.1 billion Danish kroner ($597 million), though this represented an improvement from the first quarter. The company’s revenue rose by 9% to $6 billion, recovering from a 5% decline in the prior quarter.
DSV noted that Red Sea shipping delays have not yet impacted its financial results but could have a slight positive effect in the latter half of the year. The road transport segment saw a 4.4% increase in operating profit, driven by new control towers and network expansions. The supply chain solutions segment also grew by 6.8%, benefiting from new customer additions.
DSV’s airfreight volumes increased by 10% in the second quarter and by 6% in the first half of the year compared to the previous year, with significant growth in export volumes from the Asia-Pacific region. The company projects continued growth in airfreight volumes, estimating faster growth than the overall air market.
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