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KUEHNE+NAGEL EXPECTS MUTED PEAK SEASON FOR AIR CARGO
October 23, 2024

Kuehne+Nagel expects lower freight volumes to end the year after retailers and manufacturers preemptively imported holiday goods due to global shipping disruptions.

 

The world's largest freight forwarder observed "front-loading" before the peak shipping season, as retailers increased imports to stock their shelves due to concerns about potential supply-chain disruptions.

 

Kuehne+Nagel made the announcement as it reported its third-quarter and nine-month performance. From January to September 2024, the group achieved a net turnover of CHF 18.0 billion (US$20.75 billion), EBIT of CHF 1.2 billion (US$1.38 billion) and earnings of CHF 915 million (US$1.05 million).

 

For the third quarter, net turnover rose 19% to CHF 6.49 billion (US$7.48 billion), while earnings were up 6% to CHF 339 million (US$390 million).

 

"In the third quarter of 2024, key indicators developed in a positive manner. For the first time since the end of the pandemic, EBIT and profit in the third quarter of 2024 both increased quarter-on-quarter and year-on-year," it said.

 

In terms of sea logistics, net turnover amounted to CHF 2.643 billion for the third quarter, up 36% year-on-year, and EBIT stood at CHF 256 million, 9% higher compared to the same period in 2023.

 

Net turnover in the business unit air logistics amounted to CHF 1.81 billion, up 20% year-on-year in the third quarter. However, EBIT was down 12% to CHF 120 million for the period.

 

During the first nine months of 2024, the unit managed 1.5 million tonnes of air freight, a 6% increase compared to the previous year. The majority of this growth occurred in the perishable goods segment.

 

In the third quarter, K+N's air cargo volumes increased by 6.6% year-on-year, largely driven by e-commerce activities.

 

Kuehne+Nagel said road logistics recorded a net turnover of CHF 859 million, up 3% in the July to September period, although EBIT was down 15% to CHF 22 million for the third quarter.

 

Stefan Paul, chief executive of Kuehne + Nagel, stated that the company expects its air cargo volumes to grow by a low single-digit percentage compared to last year. 

 

"We see a muted peak season this year in quarter four," Paul said. "This contrasts with our more bullish expectation at mid-year."

 

The Kuehne+Nagel chief noted that this expectation "partially reflects the extent of front-loading earlier in the year, the reduced potential emergency demand as sea freight disruption has eased, and the actual demand in some key segments, such as the German auto sector, which fell short of expectations."

 

Paul pointed out that shippers have started front-loading shipments during the third quarter due to increased uncertainties in the supply chain. These uncertainties stem from a strike at US East and Gulf ports and ongoing Houthi attacks on commercial ships in the Red Sea, which are causing rerouting around South Africa.

 

"Front-loading was a reaction by supply chain disruption sparked by the rerouting away from the Red Sea, potential fallout from port strike actions in the US and geopolitical uncertainties," he said.

 

"These uncertainties persist with the US election now in focus and its potential impact on trade policy," Paul added.

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