K+N sees flat air freight market in 2020 unless global GDP accelerates
KUEHNE + NAGEL International (K+N) chief executive Detlef Trefzger predicts air cargo markets will not pick up over the next three quarters, reported American Shipper
KUEHNE + NAGEL International (K+N) chief executive Detlef Trefzger predicts air cargo markets will not pick up over the next three quarters, reported American Shipper.
'At the moment I would say that the decline will not stop this year?or the first two quarters in 2020,' said Mr Trefzger. 'I would assume that next year we might have a flat market versus 2019.'
Speaking during a conference call with analysts after the Switzerland-based forwarder reported a weaker air freight performance in the third quarter of this year, Mr Trefzger said only a rise in global GDP could provide the trade expansion momentum needed to encourage shippers to use air freight for more shipments.
However, he also pointed out that bearish air freight markets in 2019 should be seen in context. '2018 was an exceptional year,' he said. 'We saw growth in our network of 20 per cent and more, organically. Which is also not normal.'
The weaker performance of air freight markets this year is 'also a reflection of all the trade discussions and trade noise that are ongoing.'
K+N's ocean freight and land transport units both made third-quarter gains, helping to offset the slowdown in air freight markets.
The Switzerland-based forwarder's third-quarter earnings before interest and tax (EBIT) increased by 16 per cent year on year to CHF283 million (US$287.2 million), while net turnover dropped by 1.1 per cent to CHF5.23 billion.
For the first nine months of the year, K+N's net revenue rose by 3.1 per cent year on year to CHF15.8 billion, while EBIT grew by 6.6 per cent to CHF794 million.
Sea freight, K+N's key revenue earner, registered a year-on-year increase of 7.3 per cent to CHF5.6 billion in the first nine months, with EBIT was up 10.2 per cent to CHF357 million.
'Sea freight posted a very solid net turnover growth and once again improved its performance in the third quarter,' said a K+N statement.
'Kuehne + Nagel grew significantly in a stagnating overall market and, with 3.67 million TEU, the group transported 152,000 units more than in the same period of last year, up 4.3 per cent.'