DSV volumes fall once more in Q3
24 / 10 / 2023
Image source: DSV
Multimodal freight forwarder DSV saw its third quarter air cargo volumes fall 14% year on year.
DSV recorded a decline in volumes from 375,990 tonnes in the third quarter of 2022 to 324,436 tonnes in the same period of this year.
Echoing its analysis of the first quarter of the year, DSV described the air and sea freight market in the third quarter as “characterised by reduced volumes and significantly lower freight rates”, particularly for airfreight.
The Air & Sea division’s revenue in the third quarter was down 48.7% year on year, at DKK21,912m. Its gross profit for the three months was down 27.7% on the same quarter of 2022 at DKK6,210m, with airfreight suffering more than sea freight owing to both lower volumes and lower yields, DSV said.
Airfreight revenue stood at DKK11,691m (it reached DKK22,499m in the third quarter of last year) and quarterly airfreight gross profits dropped from DKK4,793m to DKK3,089m year on year.
Over the course of the first nine months of 2023, air and sea freight demand slid as a result of the broader macroeconomic slowdown, a shift in consumer behaviour from goods to services, and a tendency to reduce inventory levels, DSV said.
Air cargo volumes fell 19% to 968,604 tonnes during the nine-month reporting period, the weakest performance being seen in exports from the Asia Pacific region (especially in the retail, high-tech and industrial sectors).
A statement said: “As more passenger planes have returned to the market, more belly-space cargo capacity has become available. In combination with weak demand, this has led to overcapacity and declining airfreight rates. During Q3, this was partly offset by higher fuel prices.”
DSV’s airfreight volume development for the January-October period was below the general market level, a fact that the company attributed to its pricing discipline and focus on high-yield cargo.
While DSV noted a gradual improvement in air and sea volume growth in the third quarter compared to the first half of 2023, the forwarder said this was “mainly due to weaker comparative figures from Q3 2022, and not an underlying improvement in demand in 2023”.
Indeed, group chief executive Jens Bjørn Andersen said: “A real recovery in global freight volumes does not seem to materialise in 2023” generally.
The Air & Sea division overall saw a 24.5% decrease in gross profit to DKK19,991m for the nine months under review. Divisional revenue fell 47.1% year on year to DKK71,118m.
DSV insisted that the decline was in line with expectations, and said both profit margins and the absolute level of earnings for the division remained strong.
Recently, DSV announced changes to the executive board. Andersen will step down, and group COO Jens H Lund will take over as new group chief executive with effect from 30 September 2024.