A 'critical year' for Agility as it pushes the digital boundaries in logistics

Agility chief executive Essa Al-Saleh

Agility recorded double-digit growth in revenues and profits for 2017, despite a difficult final quarter for its integrated logistics business, hit by strong yield pressures.

Full-year revenues jumped 14% year-on-year to KD1.4bn ($4.6bn), leading to healthy profit growth of 16% at KD68m.

Chief executive Tarek Sultan described 2017 as a “critical” year for all its business units, as Agility looks to establish itself as the industry’s “leading digital player”.

“Agility posted another year of healthy growth and continued to plant the seeds for a future of sustainable growth,” said Mr Sultan.

“To reach our target of $800m EBITDA by 2020, we remain focused on improving the global integrated logistics (GIL) division’s performance and investing in our infrastructure companies.”

While the overall fourth-quarter picture was positive – 22.6% revenue and 22.5% profit growth – GIL found itself battling declining margins. Despite a revenue increase of 6% for the three-month period, revenue margins were down 22.6% on 2016, with the company citing yield pressures across the forwarding sector.

“GIL is growing through a strategy that focuses on defined solutions and customer segments, enhanced sales productivity and efficient tradelane development,” said Mr Sultan.

“In addition, it’s building systems enabling business insight, efficiencies and increased productivity for our operations and our customers; as always we are working hard to maintain cost discipline.”

The contract logistics division fared better in Q4, with “strong growth” driven by the Middle East and Asia Pacific linked to new customers and investments in facilities across the region.

Agility’s digitisation drive has led to collaborating with Maersk and IBM on a blockchain system for tracking container shipments, the first forwarder to partner with the duo. Chief executive of GIL Essa Al-Saleh said blockchain technology would make shipping “cheaper, safer and more reliable”.

“And, as early adopters, companies like Agility can help Maersk and IBM understand the needs of shippers and develop standards that will make trade more efficient,” said Mr Al-Saleh.

“We can help customers understand how to use blockchain to improve shipment visibility, eliminate paperwork, reduce errors and shorten transit and clearance times.”

Under the partnership, Agility will identify events associated with individual shipments and share and receive information about them via Maersk-IBM’s distributed ledger blockchain technology.