Deutsche Post’s weak forwarding arm hits Q1 operating profits

First quarter 2015 airfreight volumes at German logistics giant Deutsche Post DHL rose by just 0.3 per cent to 935,000 tonnes, with group operating profits hit by the “weak performance” of the Global Forwarding and Freight business.
Although the forwarding unit’s quarterly reported revenues increased by 7.6 per cent to €3.8bn, the division’s operating profit experienced a “sharp decline” to €17m in the January to March period versus 2014.
In late April, the company announced that Roger Crook, chief executive of the global freight forwarding arm, had stepped down for personal reasons.
On the latest results, the company stated: “The weak performance of the global forwarding business unit requires a review of the transformation course by the new management.
“This review will be based on the analysis of the pilots as well as the impact of the global reorganisation that has already taken place. The results of this review will determine the further approach.”
DP DHL said that airfreight margins continued to be low compared with historical averages. Airfreight revenue in the first quarter of 2015 grew by 11.9 per cent to nearly €1.3bn.
“In light of the falling oil price, major customers engaged in aggressive competitive tendering in the second half of the prior year. Moreover, a number of new products were introduced to the consumer goods market.
“This caused transport capacity utilisation and rates to increase on the very busy routes from Asia.”
DP DHL Group expects global growth across the entire logistics sector to be “moderate at best” in 2015. 
Source DP DHL: