Third party logistics services firm UTi Worldwide reported profit of $10.5 million in the third quarter ending Oct. 31, compared to $28.5 million in the third quarter last year.
Revenue was $1.13 billion in the third quarter, a decrease of 10.7 percent from $1.26 billion in the same period last year. Net revenues (revenues minus purchased transportation costs) were $403.6 million, a decrease of 9 percent from $443.4 million.
Eric W. Kirchner, chief executive officer, said "macroeconomic and freight conditions remained weak throughout our fiscal 2013 third quarter, and we see no real catalysts to drive increases in the foreseeable future. Global economies are slowing, consumer demand is weak and clients remain very cautious.
"As we anticipated, a broad peak season failed to materialize in the third quarter," he explained. "Air freight lagged the most, as weight per shipment fell and clients favored lower cost options like ocean freight. Competition remains intense and carriers have attempted to increase shipping rates. This dynamic is pressuring net revenue per unit throughout the industry. Contract logistics activity was lower in the third quarter, primarily in Europe and the Americas, while distribution activity in Africa was higher. We continued to win new business, but at a pace that was insufficient to offset the reductions from existing business in both segments."
Kirchner added that UTi's "operating expenses, which are more closely tied to shipments rather than tonnage or TEU count, did not decrease as much as net revenue. In response to lower volumes, we are taking additional actions to remove approximately $25 million in annualized expenses, some of which we had planned to execute through our transformation in fiscal 2014.
"Our system rollout is progressing. We have launched our new operating system in five countries and our new financial system in 12 countries," he said. "We have plans to deploy both systems in more countries by the end of the fiscal year. We remain focused on achieving our operating ratio targets within fiscal 2015." - Chris Dupin