The Power 2015: Stability at the top

Stability at the top

For the top four forwarders on the Power 25 list, ranked by tonnage, there was seemingly little change. DHL’s Supply Chain and Global Forwarding divisions led the field, yet again, by a wide margin, with 2.11 million tonnes of air cargo shipped during 2015.

However, the leader hardly had an easy go of it, encountering such severe problems with the implementation of its “New Forwarding Environment” IT overhaul that it was forced to drop the entire program and take a one-time charge of $390 million in the third quarter. DHL’s gross revenues of $29.56 billion were an 8.9 percent decline from 2014, and airfreight tonnage was down 7.2 percent. It is a testament to the sheer size of the DHL Supply Chain and Global Forwarding divisions that they could take such severe bottom-line blows and still remain comfortably on top.

In the No. 2 spot again is Kuehne + Nagel, which saw a 4.7 percent increase in tonnage in 2015 to 1.25 million, due to a strengthening trans-Atlantic trade lane. Armstrong also noted that K+N was beginning to see the benefits of its $180 million acquisition of Retrans last August, indicating the “high level of interest by major companies in being part of the expanding DTM [domestic transportation management] segment.”

In next two slots, D.B. Schenker Logistics (No. 3) and UPS Supply Chain Solutions (No. 4) both showed modest increases in airfreight tonnage compared to 2014. However, while Schenker’s revenues fell 13.6 percent to $17.16 billion, UPS SCS saw revenue soar nearly 30 percent, year-over-year, following the $1.8 billion acquisition of Coyote Logistics (see sidebar).

On the rise

Below the top four on the Power 25 list, however, there was more evidence of change, as 2014’s No. 7 forwarder, Expeditors International, leapfrogged Panalpina to reach the lofty No. 5 spot. Even during the economic headwinds of 2015, which resulted in overall revenues that were almost flat with 2014 levels at $6.62 billion, Seattle-based Expeditors continued its exceptional growth streak.

Despite the airfreight slowdown in the second half of the year, volumes for Expeditors continued their upward trajectory, surging 6 percent to nearly 873,000 tonnes, on top of an already impressive 7.7 percent increase in 2014. One of the keys to Expeditors’ success, Armstrong said, was its ability to capitalize on the U.S. West Coast port disruptions and convert oceanfreight for its existing customers into air modes.

The only other forwarder on the Power 25 list to rise more than one spot was China-based Sinotrans, whose freight volumes rose 8.3 percent to 522,600 tonnes, moving it from No. 12 to No. 10 on the Power 25 list. Sinotrans carried out a significant number of international charter flights from Shanghai last year, notably to India. The company also told Air Cargo World that it is excited about a newly formed partnership with China Southern Airlines to charter freighter flights between China and the United States. This new cooperation, which began March 30, will help Sinotrans increase capacity on the trans-Pacific lane and diversify the product range moving through its supply chain.

“The rapidly developing cross-border e-commerce market continues to provide new demand for airfreight logistics services and our forwarding operations will continue to capitalize on and serve this market,” said a Sinotrans spokesperson. “Emerging markets are our first target for enhancements to our overseas cross-border e-commerce network.” Sinotrans’ airfreight subsidiary, Sinoair, is currently working on IT systems upgrades to further link domestic and international networks, as well as a country-by-country rollout of a new capacity management program.

The other forwarders in the top 10 of the Power 25 all saw increases in tonnages and moved up one rung on the ladder. Nippon Express, despite seeing gross revenues fall by 11.7 percent, had an 8 percent rise in tonnage to more than 711,000, pushing it to No. 7. Bolloré Logistics (formerly SDV USA),saw a 5.2 percent increase to 580,000 tonnes in 2015, bringing the U.S.-based forwarder to No. 8. Right behind at No. 9 is Hellmann Worldwide Logistics, which enjoyed a robust 9.6 percent annual tonnage increase to more than 561,000.

Moving from No. 18 to No. 17 on the list was French forwarder GEODIS, which increased its airfreight tonnage 10.5 percent to nearly 300,000. Someof that growth is attributable to its $800 million purchase of OHL (Ozburn-Hessey Logistics), giving it added presence in the U.S., Armstrong said.

Although its ranking remains unchanged at No. 15 for 2015, Japan-based Yusen Logistics was one of this year’s leaders in terms of airfreight growth, reporting 11 percent growth in airfreight to 344,000 tonnes, driven mostly by growth outside Japan. Scott Corless, senior vice president and general manager of Yusen’s international division, added, “While we continue to expand our commercial sales activities throughout our global network, a significant portion of our year-over-year tonnage increase can be traced back to the West Coast port disruption period.”

With the continued rise in popularity of the perishable e-commerce segment – especially in Asia – Corless added that Yusen is making more investments in its cool chain infrastructure. “To support this rising demand, we recently opened a temperature-controlled facility in Hong Kong to manage food imports from Japan and Europe, including perishables, processed foods and beverages,” he said.