Panalpina experienced declining air freight revenue in 2012, transporting 6 percent less tonnage than in 2011, but gains from the ocean freight and logistics side left the firm left it with a gross profit of CHF 1.46 billion ($1.54 billion), flat from last year.
There was some growth on the air freight side in perishables and fashion shipments, but high-tech and telecommunications shipments, some of Panalpina’s most active cargoes in this business, experienced tonnage declines. Europe-Latin America and intra-Asia were the only trade lanes that showed any growth in 2012.
Panalpina transported a record 1.38 billion TEUs of ocean freight in 2012, representing a 6 percent improvement over 2011’s numbers. Ocean freight profit, however, declined by 1 percent, year over year, and European imports and U.S. exports were weak. Containers shipped from Europe to Latin America and Africa showed strong growth; Asian imports and exports also grew.
Warehousing and distribution activities expanded in 2012, spurred by Panalpina’s new approach to logistics. The company established four new logistics competence centers, launched new software and expanded its value-added service offering.
In the Americas, Panalpina saw an overall gross profit increase of 3 percent, year over year, to CHF 444 million, despite slowing U.S. imports during the fourth quarter. Latin American activity also grew. Asia and Europe were the weak links for Panalpina in 2012, with Asia-Pacfic revenue falling, year over year, by 3 percent, and profit in the European region dropping by 2 percent.
“Our 2012 results are unsatisfactory,” Panalpina Chief Executive Officer Monika Ribar said in a statement. “We did not manage to compensate for the setback in air freight. In ocean freight and logistics, we considerably expanded our business despite a slowing market growth, but it was simply not sufficient. On the cost side, we did not react fast enough.”
In 2013, the industry is expected to remain challenging, and volatility will continue. Panalpina in planning to increase logistics growth in the coming year, while introducing cost-saving measures and programs to improve operating margins. Ribar said the company remains “very cautious” about 2013 forecasts.
“Given our high exposure to cyclical industries and the trend to lighter shipments in certain product categories, we are also critically reviewing our customer portfolio in air freight,” she said. “In ocean freight, we will build on the positive development.” - Jon Ross