Poor conditions in the air freight market dragged down the profits of global freight forwarder Panalpina.
The company’s forwarding revenue in the third quarter rose 9.6 percent to $1.8 billion, but operating profits fell 84.3 percent to $7.5 million.
Year-to-date, revenue is up 1.6 percent to $5.2 billion, while Panalpina has sustained operating losses of $5.4 million for the year, compared to a nearly $150 million profit in the same period in 2011.
“The third quarter of 2012 showed mixed results for the Panalpina Group," the company said in a statement. “Gross profit increased by 7 percent year-on-year, driven by a solid performance in logistics and ocean freight, but it was negatively impacted by a weak performance in air freight.”
“There was light and shadow in the third quarter of 2012,” said Panalpina Chief Executive Officer Monika Ribar. “On the one hand, ocean freight continued with historic record volumes and our investments into logistics have clearly started to pay off as more and more customers entrust us with value-added logistics services. On the other hand, our performance in air freight was disappointing.”
Panalpina said market share gains in ocean freight led to the highest quarterly and year-to-date volumes ever in the group’s history. For the first time, Panalpina forwarded more than 1 million TEUs in the first nine months of the year. Volumes in the third quarter were up by 5 percent compared to the previous year.
Panalpina’s air freight division saw volumes drop by 8 percent year-on-year. Europe-related trade lanes were hit hardest, particularly in the high-tech, telecom and chemicals sectors. In addition, the trend towards smaller shipments was accentuated, the company said. - Eric Johnson