Long Beach, California based UTi, a non asset based 3PL supply chain specialist turned in better than expected results yesterday following a general upward trend for the industry. With over 23 million square feet of warehousing in 23 countries the US company shows a pattern that seems fairly typical for the freight market at the moment. The CEO however offered a customary word of caution in today’s volatile conditions.
Eric W. Kirchner, chief executive officer, speaking of the second quarter results said in a statement:
"Our improved results were primarily driven by strong volumes and better operating margins. Airfreight and ocean freight volumes continued to grow faster than the market and were higher than volumes recorded in the second quarter two years ago, prior to the financial crisis. Results remain tempered by yield pressure due to continued high transportation rates, and we expect these rates to remain volatile on many trade lanes for the rest of the year. We are also expecting volume growth to moderate during the second half of the year due to a slowing global economy and more difficult comparisons to the prior year.
"We continue to be encouraged by improvements in our contract logistics and distribution business, which reported solid revenue growth and higher operating margins. Client volumes improved in the quarter, particularly in retail and consumer markets, and we continue to manage our operations more efficiently. Our transformation initiatives remain on schedule and we are making good progress in all areas."
UTi saw increased operating costs, up 9% against last year but it seems although traffic volumes were higher, rates were more competitive dragging profits back somewhat. Net revenues were up 12% for the half year against 2009 at $379 million.
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