Panalpina Annual Report 2006

Reporting Regions
Noram Regional
Competence Center
Based in San Francisco
Net revenue: CHF 1,699 million
Headcount: 2,241
Branches: 78
28 Panalpina Annual Report 2006
North America
Break­even target clearly exceeded
Rising US imports as well as strong growth in the oil and gas sector
and demand for logistics services led to a 10.6% rise in revenues,
underlining the success of the restructuring measures.
The restructuring of the North American organization
implemented in 2005 can be regarded as a
great success. The target of breaking even for the
year under review was clearly exceeded, and the
business is now back in the black.
Slimmed­down management, new leadership
The US organization again achieved a noticeable
increase in profitability and sales through streamlining
regional management, reorganizing the local
and branch office structure, improving staff training
and consolidating business with similar requirements.
An able successor to Peter Merath, who
is taking well­earned retirement on 1 February 2007,
has been found in Karl Weyeneth (42). The latter
will push ahead with developing the regional business
further.
Big increase in US imports
The USA’s ever­expanding trade deficit was again
reflected in a sharp rise in imports during the year
under review, particularly from China, Japan, the
EU and Mexico. Growth in air freight significantly
exceeded market expectations. Panalpina accordingly
strengthened its sales efforts and services
in the freight import sector. Following a reassessment
of the most important transport routes, the
Group now considers Germany, Italy, France and
India – in addition to the countries mentioned
above – as key exporters to the US. Also here,
Panalpina strengthened its commitment to ocean
freight significantly, in view of the gradual rise in
volume and a gratifying improvement in margins.
New business in the oil and gas sector and
in logistics services
Two business areas turned in the strongest growth
in this reporting region, the first being the oil and
gas industry. Houston, one of the four global hubs,
benefited from increased investment activity in
this sector. Supply chain management was the other
main area in which marked growth was achieved
in all market segments. Contracts were signed or
extended for a number of major logistics projects
in Miami, on the West Coast and in Canada. The
latest IT applications for warehouse management
were rolled out at the distribution centers in Detroit,
Wichita (Kansas) and San Francisco. The guidelines
for the selection and organization of regional
subcontractors were reviewed and tightened
in order to ensure optimal quality and enhanced
efficiency.
SME segment again expanded
The strategic initiative to reach more customers
in the SME segment began to reap dividends in
the reporting year. Several valuable new contracts
were concluded with internationally active SMEs,
including some in the key hi­tech and automotive
industries, thanks to closer cooperation between
the sales and route planning teams.
More imports from Canada and Mexico
There was also a big rise in goods imported into the
USA by road, both from its northern and southern
neighbors. The majority of Canada’s positive trade
balance is attributable to exports to the USA,
while imports from Mexico also rose because many
American companies relocate their final assembly
from Asia to Mexican plants (or maquiladores) just
across the US border. Panalpina was therefore
able to continue its expansion in this area, making
good use of the new branches that were set up
near the border in 2005.