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3PLs shrug off global slowdown with hikes in volumes


THREE of the four major forwarders that recently reported their first-quarter figures - DSV, Kuehne + Nagel (K+N), and CEVA Logistics - have improved their year-over-year growth both in volume and gross profit per TEU, shrugging off signs of a growing economic malaise.

According to the International Monetary Fund global economic activity slowed in the second half of last year amid an increase in trade tensions between the US and China, a decline in business confidence in the eurozone, a tightening of financial conditions, and higher policy uncertainty across many economies.

Despite the downturn in global economic activity, DSV managed to increase its ocean volume by 4 per cent to 359,925 TEU; the sea and air division revenue rose 12.5 per cent year over year to US$723 million. DSV's total revenue was $3 billion.

K+N, the world's largest ocean freight forwarder, posted first-quarter volume growth of 6.2 per cent year over year to 1.14 million TEU, up 70,000 TEU in the first quarter. The forwarder recorded double-digit increases in volume in the trans-Pacific as shippers raced to import China cargo ahead of the US tariffs, and similar growth in Asian exports to Europe, reports IHS Media.

CEVA Logistics, which is 98 per cent owned by CMA CGM, reported a 6.2 per cent increase in volume to 193,000 TEU in the first quarter. Revenue in the sea freight segment was up 3.8 per cent to $797 million.

The first-quarter growth bodes well for annual global container volume, growth of which is projected to accelerate from 4 per cent in 2018 to 4.8 per cent this year, according to the latest Trends in the World Economy and Trade report from IHS Markit, parent company of JOC.com.

Panalpina bucked this positive first-quarter trend with a 3 per cent decline in volume to 296,000 TEU, although the Switzerland-based forwarder, in the process of being acquired by DSV, did manage to break even in the ocean freight segment.

The three forwarders' results also showed that pricing sacrifices were avoided in the process of expanding business. DSV grew profit per TEU by 6 per cent, CEVA's yield per TEU was up almost 1 per cent, and K+N's yield per TEU was the highest it has been since the first quarter of 2017.

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