Panalpina expects busy peak as airfreight continues to grow

Freight forwarder Panalpina saw airfreight volumes increase by 8% during the third quarter of the year as it prepares for a strong peak season.
The Switzerland-based firm saw airfreight volumes increase to 249,000 tonnes during the July-September period compared with 228,000 tonnes for the same period last year.
The overall market is estimated to have grown by around 10% during the period, while rival Kuehne+Nagel registered a 20.6% improvement as it looked to grab marketshare and benefitted from acquisitions.
Airfreight revenues were also up, improving by 16.5% to Sfr739m and earnings before interest and tax (ebit) for the business were up 12.7% to Sfr30.3m.
While Panalpina’s air volume growth may have lagged behind K+N, it did better on the margin front.
The forwarder saw its ebit/gross profit margin increase to 18.8% for the period against 18.1% last year. K+N saw margins decline on a year earlier during the third quarter.
This comes as forwarders continue to struggle with margins this year as carrier charges have increased faster than they have been able to pass them through to customers.
The overall company, including its sea and logistics businesses, saw third quarter revenues increase 13.1% to Sfr1,4bn, ebit was down 8.5% to 30.1m and profit was down 24.7% to Sfr18.5m.
Its ocean business continues to face margin pressure and has faced costs related to a new IT system.
The company continues to push ahead with the roll out of its new IT software and is expecting a busy peak season.
Chief executive Stefan Karlen said: “Nine months into the year, airfreight and Logistics are well under way and showing continued solid performance.
“In ocean freight, we are growing in line with the market but due to continued low margins and productivity levels, the profitability does not meet a satisfactory level.
“Seeing the challenges particularly in ocean freight, I am pleased to say that preparations for the next big roll-out of our new operating system SAP TM in the US are progressing as planned.”
“We are well-prepared for another strong peak season in airfreight, however it remains to be seen how dynamic the carrier market will be this year.
“Low gross profit margins and low productivity resulting from the inefficiency of our legacy system will continue to hamper us in ocean freight, where for the time being we can only grow moderately to avoid incremental costs.
“It is therefore encouraging that our new operating system SAP TM was successfully implemented in Germany and that the roll-out in the US will commence this year.
“In logistics, the focus clearly lies on top-line growth and we will achieve this in the mid to long term by expanding our offering of value-added services.”
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