Kuehne+Nagel: Air freight continues to grow strongly despite tariff tensions

Air freight

Kuehne+Nagel (K+N) continued to see strong air freight bookings, despite the US-China tariff war.

Air freight “continuously strong in terms of bookings,” said Stefan Paul, chief executive of K+N International, after the release of its second-quarter results.

This contrasted with ocean freight, where bookings from China fell by around 25–30%, although much of that decline was offset by rising demand from Southeast Asia.

“It might even be that the second quarter [for airfreight] will be stronger than the first quarter in terms of the volumes,” Paul added.

“To sum it up, flattish volumes in seafreight, very good trend in airfreight continues with a high demand in the marketplace.”

Currently, items such as smartphones, routers, chip manufacturing equipment and some types of computers and laptops are still exempt from the 145% tariff that the US imposes on imports from China, although they are still subject to the previously announced 20% tariff.

On air freight profits, Mr. Paul said the outlook is unclear. He explained that the US ending the “de minimis” tariff exemption policy for packages from China could cause e-commerce volumes to decline, leading to excess shipping capacity, thereby putting downward pressure on freight rates.

When asked about how customer segments would react to the new tariffs, Mr. Paul said there was no specific model, as strategies varied by industry.

He said the high-tech and semiconductor sectors were holding steady, heavy industry was mixed, automotive continued to struggle and large consumer businesses had “stopped or paused their bookings to a certain degree”.
K+N’s air cargo business had a positive start to the year, led by semiconductors and fresh produce.

Air cargo revenue rose 13% year-on-year to CHF 1.8 billion; earnings before interest and taxes (EBIT) rose 23% to CHF 116 million; and air cargo volumes rose 5% to 514,000 tonnes.

The company said growth was driven by semiconductors, perishables and a strategic investment in China-based Apex Logistics.

Meanwhile, the automotive sector continued to be a negative for performance.

“Excluding the automotive sector, the business unit gained market share across all industries and particularly in semiconductors,” K+N said in a press release. “New cool corridors for healthcare were opened between Brussels and Chicago as well as between Brussels and Singapore.”

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Source: Phaata.com (According to Aircargo News)

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