Air freight volumes rise for Panalpina

Panalpina saw improved group level profitability in the first half of 2014 as air freight volumes grew four per cent over prior year.
However, the Switzerland-based global logistics operator said that unit profitability in both the air and ocean freight segments was affected by a “challenging market”.
While air freight rates “remained under strong pressure,” Panalpina put the focus on trade lane optimisation and expects the air freight market to grow by between 3-4 per cent in 2014.
Panalpina’s half year air freight volume growth to 417,000 tons was in line with the market. Earlier this month, Swiss logistics rival Kuehne + Nagel reported a similar half year rise in air freight volumes, up 3.9 per cent to 580,000 tons.
Second quarter air freight volumes at Panalpina were up by 1.8 per cent to 213,000 tons, compared with a 6.3 per cent surge in the first three months of 2014.
The Panalpina group’s total gross profit and earnings before interest and tax were “significantly impacted” by currency movements although both financials increased two per cent, reaching SFr777.9 million and SFr60.1 million respectively.
Panalpina chief executive Peter Ulber said that there “is still a lot of work to be done in terms of profitability”, especially in ocean freight.
Added Mr Ulber: “The fact that low margins have absorbed much of the growth in the first half of 2014, particularly in ocean freight, goes to show just how important it is that we stay absolutely on course with our strategic execution.
“Turning around loss-making operations continues to be our firm focus. In the mid- and long-term better IT systems and processes will help us improve productivity and profitability as we keep restructuring and rolling out our new operational system SAP TM.”