Operational excellence secures global supply chains: Kuehne + Nagel

Global transport and logistics company, Kuehne + Nagel, has reportedly achieved a good result for the first half of 2020 amid Covid-19 pandemic and global lockdown.

The company clarified that market share gains and the cost savings initiated by the group has had a positive impact.

Net turnover for the first half-year was 9.8 billion CHF and EBIT was 419 million CHF. Currency fluctuations had a significant negative impact on both net turnover (-5.9 per cent) and EBIT (-5.3 per cent) in the first half-year. Free cash flow increased by 5.5 per cent relative to the prior year.

“The crisis triggered by the coronavirus pandemic, which led to a lockdown in most countries, had profound and sudden negative impacts on international trade,” said Kuehne + Nagel International CEO, Dr Detlef Trefzger.

“We took the right measures early on and successfully managed Kuehne + Nagel under these difficult conditions. We expect the second half of the year to continue to be marked by major uncertainties, for which Kuehne + Nagel is well prepared thanks to its agile structure, rigorous cost management and high-quality service offerings,” he said.

“The strategic course we have set at Kuehne + Nagel in recent years is also having a positive effect in the midst of the coronavirus crisis,” said Dr Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International.

“The company has been consistently digitalised and thus remained fully operational throughout the crisis.

“The successful performance in the second quarter is owed to the good market position of Kuehne + Nagel and the recovery of the Asian markets. The good work during these past months underlines today’s high level of resilience of Kuehne + Nagel,” he said.

The months of April and May 2020 were reportedly characterised by a significant decline in road logistics order volume. Demand increased in June. In particular, the demand for domestic European transport has broadly improved to pre-crisis levels. In North America, demand for all product segments – with the exception of pharma and e-commerce – was significantly lower than in the previous year.

The business unit’s net turnover declined to 721 million CHF in the second quarter of 2020 and EBIT was down to 9 million CHF.

In contract logistics, the significant reduction in demand in the second quarter of 2020 was mitigated by stringent cost management. Essential goods and e-commerce, which now account for around half of the contract logistics portfolio, recorded significantly higher demand. Securing operations, even during the lockdown, resulted in market share gains.

The business unit’s net turnover declined to 1.1 billion CHF and EBIT to 28 million CHF in the second quarter of 2020.

Earlier this year, Kuehne + Nagel sold a major part of its UK contract logistics portfolio.

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