CEVA Logistics Remains in the Red

CEVA Logistics today reported a net loss of $54 million in the third quarter of 2013, compared with a net loss of $78 million in the same period last year.

Revenue for the third-party logistics provider, No. 27 on JOC’s list of the Top 50 Transportation and Logistics Companies, was $2.10 billion in the third quarter, declining 8.9 percent year-over-year from $2.31 billion. Quarterly revenue from the contract logistics segment accounted for $1.16 billion, dropping 4.9 percent, as a result of the sale of container logistics activities at the start of 2013 and lower volume in some markets, notably in Europe, according to the Netherlands-based company. Furthermore, revenue from the freight management unit totaled $944 million, decreasing 13.3 percent, driven by softness in volume, mainly in air freight, as well as decisions the company made regarding unprofitable contracts, CEVA said.

Additionally, in terms of geography, CEVA saw revenue decline in all three markets — the Americas, Asia-Pacific and Europe. Although the European region accounted for the most revenue, $862 million in the third quarter, followed by the Americas region with $662 million, the company has been targeting growth in the Asia-Pacific, which generated quarterly revenue of $579 million. The company recently opened its first Center of Logistics Excellence in Singapore, as well as a new aerospace storage area, and appointed Peter Dew as its new Asia-Pacific president.

“Our contract logistics business has recovered well,” said Marvin O. Schlanger, CEVA’s CEO, in a written statement. “Ocean freight volumes are stable, but we recognize that our air freight volumes are not where we want them to be. We are working to address this and strengthen the freight business in the coming quarters.”

Schlanger noted that CEVA has “added resources” to its freight management and business development teams in order to accelerate new growth for the freight network. He said the positive impact of these changes was evidenced by recent customer wins, including an expanded relationship with Ford; a new three-year deal with Michelin; an expanded contract with Avon; the addition of Rolls-Royce and Pigeon as part of a new green logistics center opened in Singapore; the creation of a technology campus in Nashville, Tenn.; and a new health care hub in Miami.

“While the overall market remains sluggish, our actions over the previous months have strengthened the company’s financial position resulting in real traction in the market and a strong cash position,” Schlanger said. “A significantly stronger CEVA further improves our ability to serve the needs of customers.”

In the first nine months of 2013, CEVA posted a net loss of $5 million, versus a net loss of $303 million in the same period in the previous year. From January to September, total revenue was $6.37 billion, down from $6.87 billion, driven by declines in the contract logistics and freight management divisions.

As previously announced, Schlanger will retire as CEO on Jan. 2, 2014, resuming his position as non-executive chairman of the board. He will be succeeded by Xavier Urbain.