Panalpina Profit Plunges 95 Percent

Panalpina, the Swiss global logistics group, reported net earnings crashed 95 percent in the first quarter from a year ago amid a slump in ocean and air freight traffic on trans-Atlantic and trans-Pacific trade lanes.

Net profit slumped to $1.65 million in the three months to March 31 from $28 million in the year-earlier period and net forwarding revenue slipped to $1.4 billion from $1.85 billion.

Gross profit, struck after deducting freight rates, customs and security surcharges, fell to $326 million from $368 million.

“The massive recession-related global volume decline seen since the end of 2008 has impacted Panalpina on all major trade lanes and had negative effects on the results in the first quarter,” said chief executive Monika Ribar.

“However, with the cost-cutting program on track and an excellent cash flow performance, Panalpina is well equipped to tackle the challenges in an ongoing difficult business climate,” she added.

Close Swiss rival Kuehne & Nagel earlier reported first quarter earnings fell 17 percent to $86 million.

Panalpina said its ocean freight traffic fell 23 percent in the quarter and air freight shipments were down 28 percent, reflecting the fact that many of its leading customers have suffered above-average order and production cutbacks.

The automotive and high tech sectors were particularly hard hit, which “severely affected” Panalpina’s air and ocean volumes across the Atlantic and the Pacific.

Panalpina said it is on target to meet its goal of cutting operating costs by $113 million in 2009, partly by laying off around 1,500 employees, or 10 percent of its workforce. By March 31 it had already reduced the headcount by 1,000.

Contact Bruce Barnard at brucebarnard47@hotmail.com .