Irish Freight & Logistics Monthly – Oct ’11

Irish Goods Exports Up by 10% in August

Seasonally adjusted Irish goods exports increased by 10% to E7.77bn in August and imports increased by 6% to €4.07bn, resulting in a 15% increase in the trade surplus to E3.70bn. The Central Statistics Office said that on an unadjusted basis, the value of exports in August 2011 (E7.01bn) was up 5% when compared with August 2010 and the value of imports (E3.76bn) up 8%. The trade surplus of E3.25bn in August 2011 remained relatively unchanged from the 2010 figure of E3.22bn.

The figures for the first seven months of 2011 compared with the same period of 2010 show:

• Exports increased by 4% to €54.26bn
• Exports of Medical and pharmaceutical products by mainly US-owned firms, increased by 11% or €1,599m
• Organic chemicals by 8% or €925m and Petroleum by 69% or €333m
• Exports of Computer equipment fell by 10% or €261m and Telecommunications and sound equipment by 25% or €124m
• Exports to the USA increased by 9% or €1,064m, to France by 11% and Germany by 8%

In the first seven months of 2011, over half (52%) of Ireland’s exports went to the USA, Belgium and Great Britain
Imports increased by 7% to €28.52bn:

• Imports of Petroleum increased by 28% or €657m
• Medical and pharmaceutical products by 23% or €465m
• Organic chemicals imports increased by 25% or €309m
• Goods from Great Britain rose by 18% or €1,360m and from Germany by 14% or €275m

In the first seven months of 2011, 53% of Ireland’s imports came from Great Britain, the USA and Germany. The nominal value of Irish exports rebounded in August to €7.8bn from €7.0bn in July; Volumes data, which lag by one month, indicate that goods export volumes fell by 12.4% in July; But the nominal data suggest that export volumes will bounce back sharply in August. The goods trade balance was €3.7bn in August, up from €3.2bn in July.

European Road Freight Still Below 2008 Peak

The European road freight sector saw growth of 3.6% in 2010 and, according to the latest forecasts by Transport Intelligence, will expand at the same rate in 2011. However, despite the two year’s consistent growth, this will still leave the market more than 10% lower than at its peak in 2008, prior to the economic slowdown.

The figures are contained in Ti’s latest report, European Road Transport and Logistics 2011, which includes analysis, market sizing and profiles of all the main European markets.

Europe’s road freight market has suffered a slow recovery, held back by troubled southern economies; including Greece, Spain and Portugal. However, Germany saw higher than average growth driven by strong domestic demand, as well as a rebound in manufacturing and exports – although largely from outside Europe. The other major economies saw much more muted growth.

Growing in the high single digits, the international road freight sector performed much better than its domestic counterpart, and this trend is likely to be repeated in 2011. Central and Eastern European countries, in particular the Baltic States, saw healthy growth as supply chains continued to develop on a European region-wide basis. The market was driven not least by a high level of trade with thriving Russia and Sweden.

Employee of Irish Firm Wins Int’l Freight Forwarder of the Year

Ms. Silvia Valles Barrera, who achieved a distinction in the FIATA Diploma in Freight Forwarding two years ago has gone on to win the overall winner award of the Young International Freight Forwarder of the Year competition for 2011. The prize was presented to Silvia at the international congress of FIATA in Cairo last week.

Earlier this year, she was announced the winner of the European sector of the award and was one of four finalists in competition for the ultimate award when she competed against the winners from the Africa & Middle East, Americas and Asia & Pacific regions.

Ms. Barrera, who is a native of Spain, is an employee of Hawthorn Logistics and is responsible for managing its clients’ international forwarding arrangements.

The awards competition, run by the International Freight Forwarders Association (FIATA), is open to candidates representing the countries and national freight associations in four geographical regions of the world.

Ms. Barrera achieved distinction level in the FIATA Diploma in Freight Forwarding in 2010. The internationally recognized diploma course is validated by FIATA and delivered by the Irish International Freight Association.

Target Express Wins Irish Haulier of the Year

Target Express, the Dublin based pallet and parcel services provider was announced as the Irish Haulier of the Year 2012 (sponsored by TOTAL) at the fifth annual Fleet Transport Awards.

With 526 vehicles and trailers and over 510 employees, Target Express is the largest Irish owned provider of pallet and parcel services to and from the UK and within Ireland. The company has 1.25 million square feet of warehouse space in twenty eight locations in Ireland and the UK. In winning the prestigious Fleet Transport Irish Haulier of the Year 2012 award, the company impressed judges with its advanced information systems and flexible transport and logistics soulutions.

Target Express was also the winner of the National Haulier of the Year award presented earlier in the evening. The firm will now go forward to represent Ireland in the European Transport Company of the Year finals in 2013.

Air Freight Traffic Falls – Low Rates Temp Hi-Tech Industry

Traffic statistics from major freight airports point to a sharp downturn in freight volume last month. Hong Kong International Airport reported a 6.1% fall in cargo tonnage, as compared to September 2010, to 325,000 tonnes. This was despite a 5.4% rise in passenger traffic over the same period. The fall in cargo volumes was driven by a 10% fall in exports. The airport commented that “Europe, North America and Taiwan experienced double-digit declines in overall cargo traffic”.

This fall was reflected in Europe’s largest air cargo facility, Frankfurt airport (see Ti Dashboard – Air Cargo: Airports). It saw a 5.3% fall year-on-year in September, with the airport’s management suggesting that overall figures for the year would be less than for those of 2010. Like Hong Kong, Frankfurt saw a 5% growth in passenger numbers for the month.

The falls in cargo volumes are all the more notable in that September marks the start of the period running-up to Christmas; normally the busiest time of the year. However in absolute terms, compared to the previous month, both airports have seen only marginal falls in volume.

There may be some hope for the air cargo sector however, as the chip maker Intel is reporting that inventories of micro-processors are being run at what it calls “lean” levels. Discussing the state of the electronics sector after its recent quarterly results, the company’s senior management observed that the falling cost of air freight was giving the sector options. Paul S. Otellini, Intel’s CEO commented that “it’s now cheaper to ship by air than it was in prior quarters. So our customers have more flexibility than we’ve seen in a couple of quarters. And so I think what you’ve got is them just staging to be cautious and not getting caught on the downside with inventory, but to be ready to pounce on any upside opportunity.”

In other words, the falling prices in air freight are tempting customers to drive-down inventories, whilst potentially increasing their demand for moving cargo by air.

DSV Report Revenue Increase in 2011

DSV has announced its results for the first nine months of 2011 with a 4.2% increase in revenue from DKK 31,451m in 2010 to DKK 32,787m in 2011. Gross profit amounted to DKK 7,322m, a 5.4% increase compared to 2010. This resulted in a gross profit margin of 22.3%.

Operating profit before special items (EBITA) came to DKK 1,837m, compared to DKK 1,638m in the corresponding period of 2010. This resulted in an EBITA margin of 5.6%. Profit before tax was reported to be DKK 1,530m.

A company statement said: “The results for the first nine months of 2011 are deemed satisfactory.”
The performance remains in line with DSV’s expectations for the full year as the company has maintained its outlook moving into the fourth quarter. Revenue is expected to be in the range of DKK 44,000m – 47,000m, while gross profit is expected to be in the range of DKK 9,800m – 10,200m and operating profit (EBITA) is expected to be in the range of DKK 2,400m – 2,550m

Aramex Reports 3rd Quarter Revenue Up 19%

Aramex, the global logistics and transportation solutions provider with its Irish operations in North Dublin, announced its financial results for the third quarter of 2011, reflecting a healthy increase in revenues and net profits, in the face of continued instability in a number of its markets in the Middle East and North Africa (MENA) region.

Aramex’s revenues for the third quarter of 2011 rose to AED 651 million, up % 19 from AED 545 million in the corresponding period of 2010. In the same period, the company’s net profits rose to AED 48 million, up from AED 46.7 million, representing an increase of 3 %.

The company’s operations witnessed healthy levels of growth across all product lines in key markets including the Gulf Cooperation Council (GCC) countries, particularly in the Kingdom of Saudi Arabia and the United Arab Emirates, in addition to Europe and Southeast Asia.

A number of factors are behind the modest growth in net profits including high fuel prices resulting in regional and global inflationary pressures on operating costs, increase in overheads, and the increasing cost of doing business in the Middle East in light of the wave of political uncertainties. In addition, they have already started a number of Greenfield operations in Africa, all of which will be announced soon, which involved opening offices and building infrastructure, and thus creating an additional burden on their operating costs in this period, before they start seeing some substantial revenue generation.

The management team in Aramex has been working diligently on finalizing a number of strategic acquisitions and joint ventures in key emerging markets in Central Asia and Africa, with expected announcements of new acquisitions by the first quarter of 2012.

Norbert Dentressangle Revenues Up 25%

French logistics operator Norbert Dentressangle (ND) has seen revenue rocket by almost 25% this year. ND reported consolidated revenue of €2.64 billion (US$3.74bn) in the first nine months of 2011, up 24.9% on the same period last year. The operator, which last year bought UK & Ireland logistics firm TDG, attributed the majority of the increase to organic growth.

Haulage revenue for the nine-month period was up 19.9%, and ND said it had increased its market share by some 5%, without passing on the diesel fuel impact.

A statement issued yesterday said logistics revenue had grown 25.8%, thanks to the integration of TDG, which continued to increase its contribution.

Freight forwarding revenue for the company, which employes 13,000 people in the UK, reached €55 million in the first nine months, continuing a strong upward growth trend, despite an unfavourable change in freight rates.

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