Kuehne+Nagel sees slower Q3 airfreight growth
25 / 10 / 2022
Photo: Atlas Air Worldwide
Kuehne+Nagel’s (K&N) air logistics division saw positive but slower growth in the third quarter of 2022 as airfreight market capacity has grown and demand dropped.
The air division’s third-quarter net turnover was SFr2.8bn, up 7% from the same period of 2021, earnings before interest and tax (ebit) was SFr323m, 35% up year on year, and air volumes fell by 7% to 543,000 tonnes.
K&N said that the air logistics division demonstrated resilient, positive volume development.
In a press release about the third quarter, the company said: “Air Logistics maintained relatively high average yields in the third quarter of 2022, marking a significant increase on the prior year’s level.”
The company said K&N Air Logistics further expanded its healthcare logistics footprint in the third quarter.
With “MedConnex,” the business unit launched regular charter flights, e.g. for vaccines, from the pharma hub in Belgium to the Americas, Asia and Africa.
The results follow a tense time in the market, which has seen an increase in capacity, against a drop in demand, while rates have started to soften.
Supply chain congestion has also begun to ease, with oceanfreight beginning to claw back business from airfreight.
Global economic strain, and the continued impact of the pandemic and Ukraine war has also dampened the industry.
Earlier this month, after IATA released its data for August, director general Willie Walsh said: “Air cargo continues to demonstrate resilience. Cargo volumes, while tracking below the exceptional performance of 2021, have been relatively stable in the face of economic uncertainties and geopolitical conflicts.
The industry body’s data for August showed that capacity increased by 6.3%, while demand fell for the sixth month in a row, although the drop off wasn’t as steep as the month before.
Last month, writing in his monthly column in the Baltic Exchange newsletter, senior analyst at investment bank Stifel Bruce Chan warned that airfreight rates are expected to “grind directionally lower” or remain stable compared with current levels despite figures showing high inventory levels.
Airfreight volumes were 1.7m tonnes in the first nine months of 2022. The air unit’s net turnover reached SFr9.1bn and ebit was SFr1.1bn.
The overall company saw third-quarter net turnover increase by 16% year on year to SFr10.bn, ebit was up 17% to SFr924m and earnings reached SFr688m, up 19% on a year earlier.
Speaking about the overall results, Stefan Paul, chief executive of K&N said: “Kuehne+Nagel posted its best-ever nine-months results.
“However, higher energy prices, broad-based inflation as well as geopolitical tensions drive additional volatility in supply chains.
“At the same time, the easing in sea and air freight markets translates to some relief for our customers.”