UTi profit off 171pc to US$10 million, hit by air to sea cargo migration

US FORWARDER and contract logistics provider UTi Worldwide posted a 171 per cent fall in third quarter net profit year on year to US$10.5 million, drawn on revenues of $1.12 billion, down 10.7 per cent.

The Long Beach company blamed a weak global economy that was driving more customers from air freight to sea freight.

"Global economies are slowing, consumer demand is weak and clients remain very cautious. A peak season failed to materialise in the third quarter. Air freight lagged the most, as weight per shipment fell and clients favoured lower-cost options," said CEO Eric Kirchner.

Air cargo volume dropped 12 per cent during the third quarter year on year, while ocean freight was flat. The air cargo volume declined was off 18 per cent in September, with the largest decline coming out of the Europe, Middle East and North Africa region.

October posted improvements, but the overall trend in the third quarter reflected the year to date, with wafer shipments falling and clients increasingly favouring cheaper sea freight.