K+N expands in groupage
Kuehne+Nagel (K+N) is to acquire UK groupage operator RH Freight, a Nottingham-based company with a second hub in southeast London plus 15 additional UK offices and two sites in Finland. RH Freight operates road services to 32 European destinations daily and handles more than 400,000 shipments per year. It is also active in sea and airfreight as well as in contract logistics, managing 30,000 square meters of warehousing.
“Due to its customer orientation, expertise and concentration on daily lines to European destinations, RH Freight fits ideally Kuehne+Nagel’s strategy to expand its European overland network and to offer its customers high quality overland products,” said Dirk Reich, K+N's executive vice president responsible for road and rail logistics. Reich added that the deal also improved K+N’s position as an integrated logistics provider in the UK.
Ian Baxter, managing director of the RH Group, commented: “Over the last few years, we have considerably expanded our service offering and gained competitive advantage due to our strong European operations. To be even more successful in the future, we need to offer customers a truly global one-stop solution.”
The acquisition was announced along with K+N’s annual results, which saw the company move ahead of its pre-crisis performance. Pre-tax profit increased by 13.4 percent to 1 billion Swiss francs ($1.08 billion), and net income was up 28.7 percent on the back of a 16.4 percent revenue increase to 20.26 billion Swiss francs ($21.82 billion).
Karl Gernandt, executive vice chairman, said K+N had gained market share in all its business units. The recovery in the world economy, supported by proactive capacity management, brought a significant upturn in airfreight business, particularly to and from the Asia-Pacific region. Overall airfreight volumes increased 25 percent to reach almost 1 million tonnes. Gernandt said the development of solutions tailored to specific vertical sectors, such as pharmaceuticals, high-tech and perishables, proved successful. The division’s operating profit improved by 47.2 percent, and gross profit margin increased from 25 percent to 31.2 percent.
The company said the economic outlook was favorable, but warned that currency risks and rising commodity prices posed potential problems ahead. “In 2011, our goal again 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 transportation,” said CEO Reinhard Lange.
The group would focus on expanding regional operations in China, India, Brazil and Colombia, Lange added.