The revenues of the world’s leading listed transport and logistics companies flattened in 2011, according to a new report by London-based researcher and consultant Transport Intelligence (Ti).
The report, Global Transport and Logistics Financial Ratio Analysis 2012
, noted these companies saw positive growth in North America and Asia, but were weighed down by weakened European markets.
Ti’s report provides a quarterly financial ratio analysis of the revenue, profit, gearing and return on asset figures achieved by 20 top logistics companies from 2007 to 2011 and, where available, results for the first quarter of 2012. The report also individually examines the varying fortunes of their freight forwarding, contract logistics, road freight and express divisions.
Despite a promising first quarter in 2011, Ti found revenue growth weakened through the remainder of the year.
“Without taking into account the effect of inflation, revenues are now at or above the levels seen just before the 2008 economic crisis, but operating profits margins, despite improvements in recent years, are still below 2007 levels,” Ti said. “An interesting finding of the report is the robust nature of freight forwarding operations. Profit margins within the sector have been largely sustained since 2007, with no significant peaks or troughs. Despite a slight revenue decline in 2011, operating margins held firm, seemingly resilient to economic uncertainty; a trait also noted during the 2008-09 economic crisis.”
The contract logistics operations of the companies surveyed experienced consistently lower margins than freight forwarders. In 2011 there were mixed results, with growth continuing and margins improving for some, but others suffering a slowdown or decline in profit margins.
“Average margins recorded by the leading players in the industry are very low - contract logistics companies’ margins briefly fell below 2 percent in the recession,” said Ti Chief Executive Officer John Manners-Bell at the Davy Capital Markets Global Transportation & Logistics Conference in London. “It must however be questioned whether the average 4 percent margins which are now being reached are sufficient to sustain an industry which is so important to competitive supply chains.” - Eric Johnson