Dutch freight and delivery firm TNT Express, which issued a profit warning earlier this month, flagged it would cut costs further and reduce its fleet on routes between Asia and Europe because of economic uncertainty, reported Reuters.

    TNT Express, which listed in May after it split from Dutch mail group PostNL, has seen a slowdown in global trade hit its cargo flights between Europe and Asia and is struggling to fix operational issues in Brazil.

    Its shares surged almost six percent in early trading yesterday after it reported better-than-expected third-quarter operating profit and said it would seek more cost cuts on top of the US$70 million in savings already planned.

    "Performance can be better and should be better," Bernard Bot, chief financial officer, told reporters as he outlined plans to reduce excess capacity on routes between Asia and Europe by cutting the fleet from a peak of four planes to either two or three.

    Bot warned that with the uncertain economic environment, particularly for next year, TNT Express was preparing for various scenarios, including at worst the kind of stark drop in volumes seen during the economic downturn in 2008.

    "Even if the economy stays steady, we believe we can do more to bolster the performance" in the European, Middle East, and African operations, he said.

    TNT, which has expanded aggressively in China and Latin America in recent years, has struggled to make its transcontinental routes profitable.

    TNT Express reported a 47 percent year-on-year drop in adjusted earnings before interest and tax (EBIT) to $59.41 million on revenues of $2.45 billion, up 1.3 percent year-on-year.

    Analysts in a Reuters poll had forecast underlying EBIT of $46.7 million on revenues of $2.45 billion.

    Besides the unwillingness of clients to pay for pricey air transport, TNT Express has been grappling with operational issues in Brazil, where a botched integration of businesses has led to a loss of customers and a drag on earnings.

    TNT Express said yesterday that performance at its Brazil operations continued to improve, and reiterated its second-half 2012 deadline for a turnaround in the business.

    Bot said the turnaround was on track but that the key issue was to lift revenues to make up for the loss of customers.

(source:http://www.cargonewsasia.com/category.aspx?id=7)