Reflecting the continued weakness of the airfreight market, first-half results from Kuehne + Nagel showed a 5.8% drop in air cargo volume to 813,000 tonnes, despite a 5.5% rise in gross profit and a modest 2.0% increase in earnings before interest and taxes (EBIT).
Describing the market as “tough,” Kuehne + Nagel said the air unit’s volume decreased “due to stagnating markets of some key industries.” Kuehne + Nagel noted, however, that it saw growth in its pharma, healthcare and perishables sectors. EBIT for the air unit was down by 4.4% compared to the same period last year, to US$174 million.
According to Kuehne + Nagel, the market-related volume decline in airfreight was largely offset by continued volume growth its seafreight and overland segments saw in the first quarter of the year.
The seafreight business saw a 4.5% growth in volume for the first half of 2019, reaching 2.39 million standard containers (TEU), or nearly 103,000 units more than in the same period in 2018. The increase produced an EBIT of $238.6 million.
In terms of overland, Kuehne + Nagel saw a 3.3% net turnover increase and a 4% rise in gross profit, year-over-year, for the first six months of 2019. North America and Europe, and especially Germany and France, drove growth in the sector, while project business in the Middle East and Africa stagnated. During the period, the group also expanded its offering for overland in Asia with a digital booking platform, which will be gradually rolled out in Southeast Asia.
Meanwhile, Contract Logistics saw gross profits increase by 2.7%, y-o-y, during the first half of the year, driven by new business in pharma and healthcare, as well as e-commerce fulfillment.