DSV sees air revenues and volumes tumble in 2023

DSV’s airfreight revenues, volumes and gross profits all took a hit last year due to improved ocean shipping operations, high inventories and a weak consumer market.

The Denmark-headquartered forwarder reported a 44.1% year-on-year decline in air revenues in 2023 to Dkr50.6bn, gross profit for the year was down 27.9% to Dkr13.4bn and volumes fell 16.2% to 1.3m tonnes.

Explaining the declines, the world’s third-largest air forwarder said: “Demand for both air and seafreight continued to be impacted by the macroeconomic slowdown and global inventory correction.

“From the second half of 2022 through most of 2023, supply chain congestion eased up and consumer spending made a shift from material goods towards services.

“Some companies found themselves with too much inventory, and an ongoing correction lowered global trade and the demand for transportation.”

DSV said that the negative volume trend was most significant for airfreight, which was affected by improved reliability and lower rates in the seafreight market and return of belly capacity.

The increased air cargo capacity led to a decline in airfreight rates over the first nine months.

However, DSV reported improving market conditions as the year progressed.

In the final quarter of the year, air revenues declined by 33.8% year on year to Dkr12.5bn, gross profits were down by 25.4% to Dkr3bn and volumes dropped 8.4% to 337,000 tonnes.

The company said that rates out of Asia increased in the final quarter of the year due to growth in cross border e-commerce traffic.

Looking ahead, DSV is expecting the air and sea markets to grow by around 3-4% in 2024. Gross profits are expected to stabilise around or slightly below fourth quarter levels.

The overall business saw revenues decline 36% year on year to Dkr150.7bn, earnings before interest and tax slipped 29.7% to Dkr17.7bn and net profit was down 29.8% to Dkr12.4bn.

Outgoing chief executive Jens Bjørn Andersen said: “DSV delivered solid financial results for 2023, in line with our expectations. In a market characterised by declining demand for transport services across most markets, we demonstrated our ability to adapt to changing market conditions, and our dedicated employees continued to deliver excellent customer service.

“During 2023, we were happy to announce an exclusive logistics joint venture with NEOM Company, and we have continued the work to strengthen our network services and industry expertise. We also made important progress on the sustainability agenda, developing roadmaps for our decarbonisation efforts.”

Andersen has been in charge of the firm for 16 years. He had been due to step down in September to be replaced by Jens Lund, but this has now been brought forward.

Thomas Plenborg, chairman of the board of directors of DSV, said: “Following a seamless and swift handover process, the time is right to pass on the responsibility to Jens Lund. Jens Bjørn Andersen has delivered incredible results and significant value for our shareholders since 2008, and on behalf of the Board of Directors, I would like to take the opportunity to, once again, thank Jens Bjørn for his contribution over the years.

“I also welcome Jens Lund as our new group chief executive. Jens has an innovative mindset and deep knowledge of our industry, and I am confident that Jens and the team around him will drive DSV’s continued journey.”