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The first indications of the performance of the European logistics industry in 2004 have been provided by a number of companies releasing their annual results. Overall the sector has experienced a good year, although there are still several underperforming markets.

Exel, which has been dogged by rumours of a takeover all year, reported strong organic and acquisitive growth. Turnover grew by 25 per cent as a result of its purchase of Tibbett & Britten and higher air and sea freight volumes in its Freight Management Division. However margins in its contract logistics division fell from 3.3 to 2.5 per cent largely due to its UK Tradeteam network operations and to the lower profitability of Tibbett & Britten although the rapid integration of its acquisition has resulted in sooner than expected benefits.

Rival operator TNT Logistics reported an increase in revenue of 9.3 per cent to €4,081 for the full year and by 22.4 per cent in the quarter, driven by the earlier acquisition of Wilson Logistics. Organic growth in the quarter was 3.4 per cent although for the first time in the year contract terminations out numbered contract wins. Operating prot grew more than six fold to €153m, corresponding to a margin of 3.7 per cent. Overall the division’s Transformation through Standardisation turnaround programme seems to be delivering results, with the underlying margin rising by 1.7 percentage points in the quarter and 0.9 points for the year. However France continued to be problematic, once more returning losses.

In other sectors, the European rail freight industry seems to be undergoing somewhat of a revival following years of marginalisation. The last month has seen a number of initiatives by freight companies, taking advantage of market liberalisation. In Germany DHL announced that, in partnership with KarstadtQuelles logistics subsidiary Optimus Logistics and Deutsche Bahn’s Stinnes, it had created an operation called Parcel InterCity (PIC).

Deutsche Bahn’s freight subsidiary Railion and SNCF Fret also extended a co-operation agreement. The two rail organisations have agreed to run non-stop ‘interoperable’ freight trains on all border crossings between France and Germany, cutting up to two hours off transit times.

In Germany the impact of the road freight toll, the LKW Maut, is being keenly watched. First indications suggest that the major express and logistics companies have had little problem with passing on the cost of the toll to their customers.

John Manners-Bell


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