Mainfreight says export trade into the US from Australia, New Zealand and Southeast Asia is largely unaffected by tariffs at this stage. Photo: RNZ / Samuel Rillstone
Mainfreight expects its full year underlying profit and revenue will beat market exceptions, though warns forward sea freight shippings are down.
The global transportation company said full year profit before tax was expected to exceed the market consensus of $375 million with sales revenue of $5.1 billion.
"Trading during April within our Air & Ocean division has been in line with prior years, albeit disrupted due to Easter and ANZAC holidays," it said in a statement to the market.
"However, we are seeing a reduction in forward sea freight bookings for May on the Transpacific trade route, China to USA."
It said the Transpacific trade lane represented about 10 percent of Mainfreight's total Air & Ocean freight volume.
"Alongside these reductions, a number of customers wishing to continue to ship from China to the USA are placing freight bookings on hold until a more defined outcome is achieved on tariff negotiations.
"It is our expectation that tonnage reductions on the Transpacific trade lane are inevitable while tariff negotiations continue to provide uncertainty for importers and exporters alike."
It said export trade into the United States from Australia, New Zealand and Southeast Asia was largely unaffected at this stage.
"Many customers in these regions have a "wait and see" approach, with normal business conditions being adopted during the 90-day tariff suspension period."
However, it said Mainfreight's operations in five regions, including 27 countries, provided ongoing opportunity should there be a reduction in US trade.
It said Mainfreight's US based business represented about 7 percent of its underlying profit for the year just ended.
"Whilst we remain dissatisfied with this performance and return, the USA market continues to provide growth opportunity," it said adding that all three US divisions of Domestic Transportation, Warehousing and Air & Ocean were in position to take advantage internal and external supply chain opportunities.
"(These opportunities) are likely to eventuate once trade negotiations are completed and some form of normality returns to USA trade."
The company's full year result ended 31 March and will be released on Thursday 29 May.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
