Air, Business, Freight News, Logistics, Sea

Kuehne+Nagel Focuses on Cost Measures

[ June 5, 2024   //   ]

Swiss logistics and freight forwarding provider Kuehne+Nagel’s first quarter earnings declined from the same period in 2023, though the company’s sea and air logistics showed slight improvement.
First quarter net turnover was down 18 percent to US$6.06 billion, with an EBIT of US$414 million and earnings before minorities of US$306 million. The results were lower overall and impacted by negative exchange rate effects of 3 percent relative to the prior year.
The conversion rate, which describes the ratio of EBIT to gross profit for the group, stood at 18 percent in the first quarter of 2024, significantly higher than the pre-Covid value of 12 percent in the first quarter of 2019. Overall, the figures are above the corresponding pre-pandemic levels.
“In a challenging environment, Kuehne+Nagel started the business year 2024 with solid but lower year-over-year results, said Stefan Paul, CEO of Kuehne+Nagel International AG. “Our focus on efficiency and streamlined structures allowed us to reduce costs per unit by 12 percent in Sea Logistics and 14 percent in Air Logistics.”
Kuehne+Nagel discontinued its regional structure, in an attempt to lay foundations for further growth and enabled more direct access to our customers worldwide. The company also strengthened its Southeast Asia services through a strategic acquisition of City Zone Express, a Penang, Malaysia-based road logistics service provider.
Kuehne+Nagel is a global leader in air and sea logistics and has strong market positions in road and contract logistics.

Sea Logistics

Net turnover of Sea Logistics fell 15 percent to US$2.1 billion with EBIT of US$217 million, down 28 percent. Sea freight volume reached 1 million 20-foot-equivalent units, or TEUs, with the business segment reporting a volume growth of 1.5 percent year-on-year.
Additionally, Kuehne+Nagel’s visibility platform Seaexplorer was expanded to include schedules for less-than-container-load shipments. Regarding the Red Sea crisis, customers successfully optimized their transport planning using real-time information provided by Seaexplorer.

Air Logistics

The net turnover of Air Logistics in the first quarter of 2024 amounted to US$1.76 1.6 billion, with an EBIT of US$104 million. Air freight volume reached 491,000 tons through the first three months of 2024, 3.4 percent higher than in the previous year.
A new temperature-controlled area was added to Kuehne+Nagel’s Air Logistics gateway at New York’s JFK Airport, with 7,200 square meters of storage space. The company intends the location to play a crucial role in further developing U.S. healthcare logistics.

Road, Contract Logistics

Road Logistics reported first quarter net turnover of 2024 amounted to US$948 860 million, down 10 percent, with EBIT plunging 42 percent to US$33 million. About 5.6 million orders were processed in the period.
The first quarter net turnover of Contract Logistics fell 10 percent to US$1.2 billion, with an EBIT of US$61 55 million.
Kuehne+Nagel inaugurated a new U.S. contract logistics facility in Piscataway, New Jersey. Covering about 10,000 square meters, the distribution center serves the fashion and luxury industry and is equipped with automation and robotics.

Kuehne+Nagel handled 1 million TEUs in the first quarter 2024. PHOTO: Kuehne+Nagel