Irish Freight & Logistics Monthly: Mar ’11

Masterlink Looks to a Bright Future as Sales Fall 11%

Sales at logistics firm Masterlink fell by 11% last year after the economic downturn squeezed the haulage and distribution sectors, however the company has said that new business ventures are expected to improve profitability in the current financial period.

Accounts recently posted by Masterville Ltd, the parent company of the Masterlink Logistics operation, show sales of €18.3 million for the year to March 31, 2010, down from €20.6 million for the previous 12-month period.

With the cost of sales reducing by 13%, the company’s gross margin improved by one percentage point (to 35%), however relatively static operating expenses meant that operating profits tumbled by a factor of three (from €775k to €214k), with pre-tax profits of €40k (€124k in 2008/9).

Headquartered in Blarney but with significant operations in Mallow and Dublin, Masterlink is one of the bigger logistics providers in Ireland, with particular expertise in alcohol/bonded warehouse logistics.

Last August, it took on the distribution contracts previously held by Thurles-based haulier Liam Carroll when the company ceased trading, a move which further increased its presence in the FMCG sector.

In a note to the accounts, the company directors said that the economic downturn had ‘obviously impacted’ on activity levels and customer demand.

“However the continuing development programme undertaken by management helped to minimise reductions in turnover and profitability and also led to expansion into new business sectors by means of acquisition and organic growth. The directors are confident that these new business streams will lead to further trading opportunities through contracts with major market operators and heightened awareness of the company brand and the quality of services provided by it,” the directors said.

Swiss Post Partners with Nightline in Ireland

Swiss Post International and Nightline have announced a partnership that will create a simpler, faster, cost-effective and more customer-focused international mail operation for customers in Ireland.

The new venture will see Nightline will become a Preferred Partner of Swiss Post International, which will enable Nightline to offer customers Swiss Post International’s extensive range of products and access to a global distribution network spanning Europe, Asia and the US.

In May last year, Nightline, which handles 20% of all parcels on Irish roads, moved from being solely a domestic parcel carrier with the opening of a UK regional office. In December, it set up an additional division, Eirpost, to manage a new postal service for Irish businesses following the liberalisation of the country’s domestic mail market.

Eirpost will handle ongoing detailed operations with Swiss Post International now the partnership is in place.

Geodis Ireland Recieves a Wet Bond Licence

Geodis Irelands Dublin Excise Warehouse Facility located in Mulhuddart, Dublin 15, just off the M3 has received a Wet Bond License from the Revenue Commissioners, Ireland.

Geodis is now offering their wine, beer and spirit customers the benefits of their logistics and value added services, which includes global import/export services via air, sea and road, national distribution including hotels, bars and restaurants, customs clearance, inventory control and visibility, high level secure facility, pick and pack, repack, labeling and fulfillment and container stuffing and destuffing.

Geodis Ireland is part of the Geodis Group, leaders in providing Wine and Spirits Logistics. Our customers are delighted that all their logistical requirements are being dealt with under one roof.

European Box Traffic Up

A strong increase in container traffic across Europe was seen in January, according to Hackett Associates and the Bremen Institute of Shipping Economics and Logistics. The latest Global Port Tracker: North Europe Trade Outlook shows a total of almost 2 million teu imported in January, a 16% increase on the same month last year, and
6.7% up on December 2010.

Imports over the first quarter of 2011 are on track to post a 7.3% increase over the same period last year. While export volumes for January were, at 1.2 million teu, 7.4% down on December’s total, they were 11.5% higher than January 2009.

Meanwhile exports are anticipated to see single-digit, year-on-year increases in four of the coming six months, and month-on-month declines are projected in two.

The Global Port Tracker monitors six North European ports: Le Havre, Antwerp, Zeebrugge, Rotterdam, Bremen/Bremerhaven and Hamburg.

Le Havre was the only one of the six ports to see decreases in both imports and exports in January, due to strikes. The total plummeted by 53,000teu to 120,000teu, down 30.5% on the previous month and 27.6% year on year. However volumes are anticipated to rebound this year.

Ben Hackett, founder of Hackett Associates, said the challenges that 18,000teu ships coming onto the market present will include the logistics required for the terminals to shift the boxes in and out of the gate without ending up with congestion, and the pressure on the inland sector with railroads and inland waterways to absorb the surge in weekly volumes.

Strong Sales Help CEVA Push Up Profits

Ceva has reported a 25 per cent rise in sales and operating profit for 2010 after a strong performance in the last quarter. EBITDA for the year rose from 233m euros in 2009 to 292m euros, while revenue rose from 5.5bn euros to 6.8bn euros

In the fourth quarter EBITDA was up 35 per cent on sales up 22 per cent. This follows a strong performance in the third quarter, leading chief executive John Pattullo to describe 2010 as a year of two halves.

“I’m delighted with the progress made across the group in 2010. After a challenging start to the year, we have focused relentlessly on business basics and on driving a series of transformational projects,” he said.
Key to the second half improvement was a move to greater centralisation of buying in the freight management business which enabled it to address the issue of rising freight rates and margin compression seen in the first half.

The business is still only three years old and has been working on a number of large transformational projects. A key initiative in the Freight Management business is Project Uno which is designed to spread a consistent best practice across the business globally.

The Contract Logistics business has been focusing on continuous improvement (kaizen) along with lean processes. Pattullo said each operating unit was now set targets to come up with improvements each year. As a result, Ceva had developed a database of 7,000 “kaizens” which could be used to spread best practice across the group.

Pattullo said: “We have a well defined operating model, a clear plan for future growth and have established good momentum as we enter 2011. We are confident that we will continue to grow both revenue and profit in the coming months.”

Kuehne + Nagel buys RH Freight

Kuehne + Nagel is to buy RH Freight, the Nottingham-based groupage operator as part of its strategy to expand its European overland network. K+N has also reported a 13.4 per cent rise in operating profit (EBITDA) to CHF 1bn for 2010 on sales up 16.4 per cent CHF 20.2bn.

RH Freight handles 425,000 shipments per year and operates to 32 European destinations daily. Besides its core activities, RH Freight is also active in sea- and airfreight as well as contract logistics, with 30,000 sqm of handling space under management.

K+N is acquiring the shares of RH’s parent company, Rennies Investment Ltd, RH employs 630 staff across 17 locations in the United Kingdom including hubs at Nottingham and South East London, along with two sites in Finland.

Dirk Reich, Executive Kuehne + Nagel’s vice president for Road & Rail Logistics, said: “RH Freight fits ideally Kuehne + Nagel’s strategy to expand its European overland network and to offer its customers high quality overland products.”

Looking ahead, group chief executive Reinhard Lange said: “In 2011 again, our goal is to achieve profitable growth above market average in sea- and airfreight. In contract logistics we also target growth above market average while keeping margins stable. A combination of organic growth and strategic acquisitions will result in further progress in European overland transport.”

Panalpina sets out growth plans

Panalpina is targeting China, India and Brazil to drive growth in the future after a year in which it saw sales rise by 20 per cent. Gross profit rose 7.5 per cent at Panalpina last year to CHF 1.48bn (£983m) while sales were up 20 per cent to CHF 7.2bn (£4.8bn).

However, non-recurring charges meant that it made a consolidated loss of CHF 26m (£17m) for the year.
Chief executive Monika Ribar said: “We succeeded in taking full advantage of strong global economic growth, raising our core activity business volumes at rates that outperformed market averages. With our gains in market share and robust growth in the adjusted margins, we have solidified our position in the industry.

“The various measures initiated at the start of the year have clearly come to fruition, and the completion of investigations by the US Department of Justice is a relief for the organisation.” Growth in the air freight market reached 19 per cent, and ocean freight rose by 11 per cent.

“While these developments were driven primarily by China and other emerging-market economies, North America and Europe also rebuilt momentum.”

Looking ahead Ribar said: “We anticipate single digit market growth for both air and ocean freight this year, and seek to win further shares of the market. To this end, we will further expand our global sales organisation and continue to invest in growth markets such as China, India and Brazil, as well as in selected industries.”

MSC Announce Improved European Transit Times

With effect in April 2011, MSC will reshuffle the Silk, Lion, Dragon and Tiger services to offer more competitive transit time. From Asia to Europe (westbound) transit time improvements of up to 7 days will be achieved to the base ports and improved connectivity which complements the feeder service schedule.
Rotation of port calls are as follows:

• Silk Service : Effective Vessel/Port call/Date: MSC Daniella S1114R – Ningbo – 30th March 2011 Ningbo – Shanghai – Xiamen – Hong Kong – Chiwan – Yantian – Singapore – Antwerp – Felixstowe – Hamburg – Bremenhaven – Rotterdam
• Lion Service : Effective Vessel/Port call/Date: MSC Bruxelles L1114R – Dalian – 27th March 2011
  Dalian – Xingang – Pusan – Qingdao – Ningbo – Shanghai – Nansha – Hong Kong – Chiwan – Yantian – Le Havre – Hamburg – Bremenhaven
• Dragon Service : Effective Vessel/Port call/Date: MSC Fabiola D1114R – Dalian – 1st April 2011
  Dalian – Xingang – Pusan – Qingdao – Ningbo – Shanghai – Yantian – Hong Kong
  - Chiwan – Singapore – Gioia Tauro – Valencia – Barcelona – La Spezia – Fos-sur-mer
• Tiger Service : Effective Vessel/Port call/Date: MSC Ivana T1115R – Qingdao – 1st April 2011
  Qingdao – Pusan – Shanghai – Ningbo – Hong Kong – Chiwan – Singapore – Port Said – Beirut – Piraeus – Istanbul

For more information, please contact your local MSC office.

CMA CGM turnaround leads to a record year

CMA CGM has announced record financial results after a desperate search for new investment to reduce its debt. The world’s third largest container shipping group reported revenue of US$14.3 billion for 2010,36% up on 2009 – the result of gaining investment, higher volumes and improved freight rates.

Just over nine million teu was carried during the year, up 15% on 2009, while capacity increased 17.7%, representing 8.6% of the global fleet. The company recorded a net profit of $1.62 billion, up from $1.4 billion in 2009, while ebitda was $2.51 billion for the year. “All of the markets saw strong growth during the year,” said the company.

“Asia-Europe and intra-Asia lines enjoyed record business, while the Asia-US lines have now returned to pre-recession levels after having been severely impacted by the fall-off in world trade.” Rodolphe Saadé, Executive Officer of CMA CGM Group, said: “The excellent results were driven by the strategy introduced in 2009 and pursued in 2010.

“They effectively demonstrate the strength of our business model, as the group successfully capitalised on the upturn in world trade during the year.” He added: “The group will continue to expand during 2011. The issue of $500 million in redeemable bonds to the Yildirim Group, being now finalised, CMA CGM enjoys a stronger financial position that it intends to consolidate, in particular by diversifying its sources of financing”.

The Yildirim Group investment and the company’s return to profitability has decreased its net debt from $5.5 billion in 2009 to $4.5 billion.

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