DHL airfreight volumes down 4.6% in 2019

The world’s largest airfreight forwarder DHL Global Forwarding saw airfreight revenues and volumes decline last year, but gross profit improved (see charts at end of article).

The DHL Global Forwarding, Freight division saw total airfreight volumes for 2019 decline by 4.6% year on year to 2m tonnes, while revenues were down 3.1% to €4.8bn.

However, gross profit improved by 0.7% on 2018 levels to €949m last year.

The decline in air revenues and volumes reflects a downturn in the overall airfreight market last year, which IATA figures show declined by 3.3% in 2019.

Rival Kuehne+Nagel saw its airfreight volumes slip by 5.7% to 1.6m tonnes last year.

Overall revenues for the division improved by 1% to €15.1bn and earnings before interest and tax (ebit) increased by 17.8% year on year to €521m.

“Despite the [air] volume decline, gross profit from airfreight increased slightly thanks to better margins,” the company said.

“Our industrial project business performed significantly better than in the previous year.”

Looking at the overall Deutsche Post DHL business, group revenue was up 2.9% year on year to €63.3bn, with all five divisions contributing to this positive performance. Ebit improved by 30.6% to €4.1bn – a new record. 

Deutsche Post DHL chief executive Frank Appel said: “Thanks to our broad geographic set-up and our comprehensive portfolio we are in a very robust position and more resilient than other companies in our sector.

“We succeeded in growing further in all areas and generating record earnings despite the challenging global economic environment in 2019. Of course, we cannot disconnect completely from the global economy.

“We will not remain entirely unaffected by this worldwide crisis. However, it is currently much too early to judge its financial impact.”

“In spite of this, we are forging ahead with our Strategy 2025 and putting the company on track to continue our profitable growth in 2020 and beyond.”

In early March, the company said it expected to take a €70m hit on its operating profits in February as a result of the coronavirus outbreak.

The express, parcel and logistics giant said that it had a very good start to the year in January and was prepared for the usual effects around Chinese New Year.

However, since then, its express and freight forwarding businesses have been particularly affected by a decline in cross-border trade flows into and out of China.

This comes as Chinese New Year holiday office and factory closures were extended to try and contain the outbreak.

Group-wide, the negative impact of the coronavirus crisis on earnings, before interest and tax (ebit) amounted to around €60-70m for the month of February, compared to the
initial internal planning.

Implications for the group results for full year 2020 “cannot be currently concretely assessed”, the company said.

Should the macroeconomic situation normalise again, there could also be positive effects for logistics companies, DP DHL said.

However, in case of a longer duration or a worsening of the current situation over the coming months, the negative impact for the group is likely to outweigh the positives.

DHL Global Forwarding 2019 results