K+N sets eight-year expansion record as shipping for Miele, Toms booms

Freight forwarder K+N reported Q1’21 revenues which increased by 22.8% year over year, the fastest rate of expansion since at least 2014. The revenue expansion in turn resulted in a 134.2% jump in earnings before interest and tax (EBIT), echoing the jump in profitability seen by DP-DHL as outlined in Panjiva’s research of April 13.

In percentage terms the expansion was led by a 51.2% increase in net turnover in the air freight division where the firm’s volumes handled rose by 16.4% year over year. That marked the first increase since Q3’18 and also represented an increase of 5.9% compared to a year earlier.

The global airfreight sector has also seen an improvement in volumes, rising by 10.8% year over year in February according to IATA data. A continued depression in available capacity, which was still 10.3% below the year earlier level based on the IATA data, explains the elevated achieved rates achieved by K+N.

Similarly, there was a 38.8% surge in ocean freight revenues, which in turn was mostly the result of a 42.7% jump in conversion rates as markets remained congested. Ocean freight volumes linked to the firm only increased by 2.0% year over year in Q1’21 and were still 4.4% lower than the same period of 2019.

Airfreight, achieved rates drives K+N revenue surge

Chart segments growth in K+N revenues by factor. Calculations based on company financial data. Source: Panjiva

K+N’s lackluster ocean freight volume growth contrasts with comments that there was “exceedingly high customer demands particularly in the US” and that “volume growth was particularly strong in the consumer goods segment“.

Panjiva’s data shows that U.S. seaborne imports linked to K+N increased by 40.6% year over year in Q1’21, suggesting volumes handled on other routes declined significantly. The growth was indeed led by consumer products, with total imports across seven consumer-facing sectors tracked by Panjiva* having increased by 74.4% year over year in Q1.

The expansion has been led by a 202.4% rise in imports in the Apparel / Textiles segment, including a surge in shipments for Deckers Outdoor and Toms.

That was followed by a 103.7% rise in shipments of household appliances including accelerating imports handled for Miele and Samsung Electronics. Even the slowest expanding sectors of Food / Beverages and Household / Personal Care climbed 43.4% and 34.3% higher respectively versus a year earlier.

The jump in demand, when coupled with an “environment of limited container capacities, reduced terminal productivity” has led the firm to expect the “tense market environment” to “remain challenging for the remainder of another atypical year“.

Clothing, appliances lead K+N volume growth