Wednesday 26th Oct 2016 - Logistics Manager

K+N targets logistics productivity

Kuehne + Nagel has been taking steps to improve productivity in it’s contract logistics business after margins slipped in the first quarter.

Nevertheless, group operating profit (EBITDA) was up 9.2 per cent on last year at CHF249m (£167m). Sales were up 4.7 per cent to CHF4.8bn (£3.2bn).

On a currency adjusted basis sales were up 17 per cent and EBITDA was up 21 per cent.

Sales in contract logistics were up 7.9 per cent (currency adjusted) and new business wins contributed to a reduction of idle space from 12 to 7 per cent compared with the previous year’s first quarter, the group said.

“However, start-up costs for various new projects negatively impacted EBITDA, which was 8.9 per cent below the preceding year. EBITDA margin declined from 4.2 to 3.9 per cent. Measures have been implemented to improve productivity.”

Sales in the European road and rail business were up 15.1 per cent (currency adjusted) while EBITDA remained stable on last year’s level, “despite continuous price pressure, fierce competition and investments into the expansion of the European groupage network and its full and part load activities”.

The group acquired RH Freight during the quarter – the results will be consolidated from April 2011.

Sea container volume rose by 14 per cent while – according to first estimates – the global container market grew between 7 and 8 per cent.

Air cargo volumes were up 21 per cent against an estimated market increase of six or seven per cent.

“The good results in the first quarter underline the value of our global logistics capabilities, flexibility and operational efficiency in a market influenced by different economic conditions, political unrest and natural disasters,” said chief executive Reinhard Lange. “As planned we expanded our activities in all business units while at the same time increasing productivity.”