For example Kuehne and Nagel’s sea freight business saw both turnover and EBITDA (Earnings Before Interest, Depreciation and Amortisation) fall slightly with growth in its air freight forwarding division compensating for this leading to both higher revenues and profits. The picture was not so different in the other market leader, Expeditors. Here revenues and profits edged-up in the low single digit percentages although there were also signs of better growth in the air freight sector.
Neither performance may sound very exciting, however compared to DHL Forwarding and DHL Freight, these two have shown a degree of stability. DHL blame their 5% fall in revenue on currency fluctuations however the 16% fall in EBIT suggests a weaker business. CEVA suffered even more badly, with heavy falls in revenue and a painful dip of two-thirds in profits even allowing for exceptional items. CEVA do have an explanation which is a minor crisis of confidence generated by the recapitalisation of the company but this is not the entire problem.
Damco appears to be another company with internal problems. Its revenue dynamics were broadly similar to the market. However, even leaving aside very large write-offs for restructuring, the company slumped to a $31m loss. Again this may be due to a one-off, which in Damco’s case is its relocation to Amsterdam which resulted in the loss of staff.
Panalpina has also only begun to stabilise its business as even its CEO commented that the company was only the same size as it was at the IPO in 2007, although forwarding revenues and profits did grow over 2013. Here it is too early to tell if it will sustain the change in its previously accident prone fortunes. DB Schenker Logistics is conspicuously absent from this analysis as it is yet to release figures indicative of its performance in 2013.
Kuehne and Nagel and Expeditors remain the leading performers in the freight forwarding market over the past twelve months despite dismal growth in underlying demand. Looking at their ability to grow faster than the market it is tempting to believe that much of the strength of the leading players is at the expense of their weaker rivals, moreover much of this strength comes not from any magic formula but simply from the ability to avoid mistakes