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Global Logistics Focus Sept.21, 2015

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Page 58 of 63 THE JOURNAL OF COMMERCE 59A 2015 THE JOURNAL OF COMMERCE GLOBAL LOGISTICS FOCUS air freight and 10 percent for ocean contain- ers didn't materialize as industry revenues were "pretty much in a Q2 doldrum." UTI said its forwarding volume was down year- over-year, but stabilized month-to-month in the second quarter. But "normal seasonal volume growth did not occur in the second quarter due to the global macroeconomic slowdown," Feitzinger said. "We do not expect macroeconomic headwinds to abate during the second half of the year, but we do anticipate that our second-half volumes and net revenues will benefit from the new client wins we recorded in the first half of the year," he said. UTi posted a net loss of $70.7 million in its fiscal second quar- ter ended July 31, compared with a loss of $19.2 million a year earlier. The company said it now projects earnings before inter- est, taxes, depreciation and amortization to total $75 million to $100 million in its cur- rent fiscal year, compared with its previous projection of $125 million to $125 million. It was the second major logistics provider to downgrade forecasts recently for the sec- ond half of the year. Just days earlier, Hong Kong-based Kerry Logistics presented a gloomy picture after announcing an 11 percent increase in net profit for the first half of the year, to $69 million. "The overall economic outlook in the near term is bleak, and likely to lead to f lattish demand for products and logistics services globally," the company said in a statement. "Main- land China's economic slowdown and Europe and Japan's weak economies have dampened regional growth in the Associa- tion of Southeast Asian Nations. While the U.S. is gradually recovering, its growth is uneven and not yet strong." It said strong performances in Hong Kong and Taiwan and stable business in China improved the group's operating profits in the first half. In a statement to the Hong Kong Exchange, Kerry said net profit increased 11 percent to $69 million, revenue increased by 2 percent to $1.3 billion, and core operating profit was up 16 percent to $120 million. With a slowing China, Kerry expanded into newly developed markets such as the pharmaceutical sector in Hong Kong and Taiwan, and the automotive sector in Hong Kong and China. "These initiatives are driven toward making f ull prepa- rations for sustained growth when the economy improves," the company stated. DHL Pours Investment Into Africa DHL EXPRESS WILL invest $20 million in sub-Saharan Africa this year, taking the Germa n log istics g ia nt 's total invest - ment in t he cont inent to more t ha n $50 million in the last year. The investment reflects the importance of emerging mar- kets to DHL, which Deutsche Post DHL CEO Frank Appel said contributed more than 20 percent of the group's revenue, a figure expected to grow to 30 percent by 2020. "Therefore, we will continue to concentrate on organic growth by invest- ing into promising present and future markets," Appel said. "DHL already has a strong footprint in Africa, but we see some excellent opportunities to further increase our presence in the sub-Saharan region. South Africa's exceptional geo- graphic location as the gateway to Africa, and Nigeria's g rowing g ross domestic product and diversifying markets are only two of the many important indicators for this." Major DHL Express projects include upgrades to facilities and shipment han- dling systems throughout the region. Its investment follows $16.3 million by the Supply Chain division and $18 million from the Global Forwarding unit. DHL Global Forwarding's investment went into the development of 130,000 square feet of warehouse space and 60,000 square feet of office space at the Plumbago Business Park in Johannesburg. "We have estab- lished world-class facilities in sub-Saharan Africa to support our global network. We are committed to sub-Saharan Africa and will continue to build on our successful four-decade legacy in the region," Appel said. Dramatic growth will be seen in the China-East Africa trade, particularly the nations of Malawi, Mozambique, Zambia, and Zimbabwe, whose trade with China is expected to increase 91 percent by 2020, according to IHS principal analyst Krispen Atkinson. "It's all around manufactured goods. East Africa is becoming a new hub for the Chinese," Atkinson said. Drone Delivery Takes to the Air in Finland F I N N I S H PO S TA L O PE R ATO R Post i t his month completed a four-day trial for parcel deliveries using a robotic drone helicop- ter. Posti used a remotely piloted aircraft system called Next Eagle to carry pack- ages weighing up to 6.6 pounds between Helsinki and the island of Suomenlinna 2.5 miles offshore, according to a report by Posta l Tech nolog y Inter nat iona l. "New technologies make online shop- ping quicker and easier for both senders and recipients," said Jukka Rosenberg, Posti's senior vice president of parcel and logistics services. "We want to experiment with different delivery options which are feasible in Finland and increase the cus- tomers' freedom of choice." DHL has been "East Africa is becoming a new hub for the Chinese." "The overall economic outlook in the near term is bleak."

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