During the second quarter of 2016 it became evident to Panalpina, the global logistic provider, that the oil and gas business would not bounce back any time soon. The company therefore decided to realign its capacities with its current volumes and not wait for the market to recover.

“The encouraging news is that the rest of the business continued to show considerable robustness against the backdrop of receding markets in air and ocean freight,” said CEO Peter Ulber. “The underlying profitability remained stable for the first half year.”

Panalpina’s air freight volumes increased eight percent in the first six months of 2016, while the market decreased by an estimated three percent. Volumes from acquired companies accounted for six percent of the air freight growth.

With higher volumes in the perishables sector but lower volumes in the oil and gas sector, the company’s gross profit per ton decreased four percent to $690, resulting in a gross profit overall of $304.5 million.

Significantly lower volumes in oil and gas and a discontinued high-volume contract meant that Panalpina’s ocean freight volumes in the first half year decreased nine percent year-on-year while the market shrank by an estimated one percent. However, gross profit per TEU increased eight percent to $323, resulting in a gross profit overall of $232.9 million.

Panalpina’s logistics gross profit stayed virtually stable with a gross profit of $198.9 million in the first half-year as compared to $205.2 million last year.

“We still consider the oil and gas industry as a strategic business and are confident that we have taken the right measures in a market that is slowly stabilizing,” said Ulber. “In all other industries, our business has shown good momentum and we expect this to continue throughout the year. Cost control remains a key priority as we continue to balance our business and product mix.”