Mainfreight tightens belt as global economic pressures cloud trading prospects

Mainfreight is introducing a hiring freeze and focusing on “doing more with less” branch by branch as slowing global economies, inflation and swiftly falling sea and air freight rates dim its trading outlook.

Managing director Don Braid told shareholders at the global logistics company’s annual meeting in Auckland on Thursday that globally, freight volumes were reducing as economies slowed, with inflationary pressures felt in all markets.

Freight congestion issues that have plagued the logistics sector since the pandemic were unravelling with a swift reduction in sea and air freight rates.

In a presentation on June quarter trading, the company said profit before tax for the group was down 43.3 per cent on the same period the previous financial year at $83 million.

Group revenue was 19.2 per cent down at $1.18 billion.

The company expected “reasonable” activity in its transport operations across Australia, but poorer performances in this area in New Zealand, the US and Europe.

Warehouse operations across all its regions were expected to be “reasonable”, with better “defensive” performance predicted for the New Zealand-Australia air and ocean operations.

The US and Asia had been hit hard by falling volumes and rates, particularly on the Transpacific routes, the company said.

Its response to the tighter market conditions would be the management of overhead cost structures, including a hiring freeze and a focus on efficiencies branch by branch.

Growth and development of the global network was still on the agenda.

Mainfreight would increase its range of customer services and focus on operational areas it excelled at such as DIY, beverage, food, retail and the transport of perishable goods.

It was also working on better distribution of trade lane focus for the air and ocean operation.

Mainfreight in FY23 employed 11,311 people in its 331 branches across 26 countries. It took on 981 extra people in FY22 to meet pandemic-fuelled freight demand.

Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.