status report

Economic Environment

 
In 2017, Kuehne + Nagel expanded its global leading position in Seafreight with 4.4 million TEUs managed in container traffic. The Group confirmed with 1.6 million tons in Airfreight its global number 2 position, reported on significant growth and profitability improvement in Overland and gained substantial business from high-profile customers in Contract Logistics.


Kuehne + Nagel has specialised in complex end-to-end supply chain solutions, which are managed in the global network of Logistics Control Towers and performed in cooperation with all Kuehne + Nagel business units. These integrated logistics solutions not only increase transparency and efficiency in the supply chain but also optimise information flows between the participating partners and customers. This allows Kuehne + Nagel to support its customers’ value chain, a decisive factor in a highly competitive and fast growing market.


In 2017, the world economy grew by estimated 3.0 per cent (2016: 2.4 per cent) due to a recovery in industrial activity and a pickup in global trade. The United States, Japan, China, and especially the European Union significantly contributed to the improved global growth, with projections for 2018 confirming a solid growth. 


Mature economies have shown clear indications for stronger momentum in domestic demand and export. Growth for these countries in 2017 increased by an estimated 2.3 per cent versu1.6 per cent in 2016.


Emerging markets are estimated to have grown by 3.7 per cent in 2016 and 4.3 per cent in 2017, to a large extent based on improving conditions for large commodity shippers and improved domestic consumption. (Based on: World Bank, Global Economic Prospects, January 2018).


In 2017, the international logistics industry experienced world trade volume growth rebounding from low levels in 2016. The estimated world trade volume growth increased to 4.7 per cent in 2017 versus 2.5 per cent in 2016. 


Advanced economies’ world trade volume grew from 2.6 per cent in 2016 to estimated 4.1 per cent in 2017, whereas in emerging markets and developing economies from 2.3 per cent in 2016 to 5.9 per cent in 2017. (Based on: IMF, World Economic Outlook Update, January, 2018).

On the carrier side, the market in 2017 was characterised by highly volatile freight rates as a result of the continued imbalance of capacity and demand of carriers and a wave of consolidation in the shipping industry.


Kuehne + Nagel‘s volume growth was significantly above the market, supported by the improved market dynamics in 2017, resulting in strong turnover growth of 11.2 per cent. In spite of margin pressure due to consolidation in the supplier market and a more competitive market environment, the Group was able to increase gross profit by 7.2 per cent and grew its EBIT by 3.2 per cent in 2017 (excluding negative impacts of currency translation of 0.4 per cent and acquisitions of 0.7 per cent). The Group achieved its target of 5.0 per cent EBIT in relation to net turnover.