Kuehne+Nagel maintains positive outlook as volumes slide

Global shipping logistics giant Kuehne+Nagel’s total earnings decreased 47% in the first half of 2023 compared with the first half of 2022, yet company leaders remain positive about the results, despite a continuing slide in airfreight volumes. Net earnings totaled 860 million Swiss Francs ($989 million) year over year, compared with $1.9 billion in the first half of 2022. THE BIG PICTURE: As expected, volumes continued to decline in air cargo, totaling 957,000 tonnes in the first half of 2023, down 44% YoY. Many other forwarders reported similar trends in Q1. See Kuehne+Nagel Q1 financial results here. See 2022 H1 K+N results here. BY THE NUMBERS: Results from 2021 and 2022 were inflated due to the pandemic, leading to seemingly drastic reductions in 2023, company executives said in today’s earnings call. Net turnover was $12.7 billion for the first half of 2023, down 38% YoY; and EBIT was $1.2 billion, down 48% YoY. [caption id="attachment_57133790" align="alignleft" width="300"] Kuehne+Nagel's SAF partnership is the first of its kind for technology logistics. (Photo/Kuehne+Nagel)[/caption] WHAT THEY’RE SAYING: Declining volumes were expected through the second quarter, though the market appears to be leveling, Kuehne+Nagel executives said during the call. “Kuehne+Nagel coped well with the transition from the exceptional economic situation shaped by the pandemic,” Chief Executive Stefan Paul said . “In a weakened economic environment, sea and contract logistics gained market share and kept earnings stable. “In contrast, volumes in air logistics declined broadly in line with the market. While our ongoing cost-control efforts became more visible in the second quarter of 2023, our strategic path is unchanged with a focus on high-quality logistics services and an extraordinary customer orientation,” he added. MARKET REACTION: K+N (NASDAQ:KHNGF ) shares gained $6.17, or 2%, Tuesday to close at $313.99. FUTURE OUTLOOK: Kuehne+Nagel continues with its initiative Roadmap 2026, setting financial growth targets for all logistics arms. This includes the forwarder’s June acquisition of Morgan Cargo , a South African freight forwarder specializing in perishable goods. Morgan Cargo handled more than 40,000 tonnes of airfreight and more than 20,000 TEUs of sea freight globally in 2022. Kuehne+Nagel also developed a strategy for e-commerce expansion, expanded coverage for its Japanese and Korean market, announced a major contract with a semiconductor equipment manufacturer, and strengthened its sustainability goals by increasing its sustainable aviation fuel targets. “In the first half of 2023, the Kuehne+Nagel Group’s financial results were significantly greater than the comparable figures of the [pre-pandemic] period and the group has performed well in the new environment,” Joerg Wolle , board of directors chair of Kuehne+Nagel International, said during the earnings call. “In the coming years, Roadmap 2026 will remain the key driver of Kuehne+Nagel’s strategic development. The program, launched in March 2023, was very positively received both internally and externally and we are already seeing the first successes,” Wolle said. “Our focus remains on the provision of high-margin services and the development of market potential in Asia, Africa and the Middle East.” Join Air Cargo Next for the second annual Air Cargo Tech Summit on Monday, Sept. 18, and Tuesday, Sept. 19, at the Brussels Marriott Hotel Grand Place in Belgium. For more information on the summit and to register, click here .

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