DHL’s airfreight revenues declined in the second quarter of the year despite an increase in volumes, while the overall business focused on cost control to stave off the impact of a volatile trade environment.
During the second quarter, air volumes at DHL Global Forwarding increased by 1.2% year on year to 442,000 tonnes, while air revenues fell by 5.3% to €4.6bn and gross profits were up 0.1% to €245m.
DHL said the decline in revenues was mainly the result of negative currency effects.
“DHL Global Forwarding, Freight faced volatile volume and freight rate developments due to trade conflicts,” the company said in a press release.
For comparison, K+N saw its air volumes increase by 9.3% year on year to 565,000 tonnes as its performance was driven by perishables, semiconductors, and cloud infrastructure business, as well as volumes won as a result of DSV's takeover of Schenker.
DSV saw its airfreight volumes increase 46% year on year to 508,000 tons driven by its takeover of Schenker on 30 April.
The overall DHL Group saw second quarter revenues decrease by 3.9% year on year to €19.8bn, but cost control measures helped protect operating profits, with earnings before interest and tax (EBIT) increasing by 5.7% compared with last year to €1.3bn and consolidated net profit up 6.7% to €859m.
The company’s profit improvements were driven by its "fit for growth" programme that sees the company improve its cost structure in combination with regular capacity adjustments.
"For example, DHL Express further reduced costs in its air freight network and costs for pick-up and delivery in the second quarter," the company explained.
The company said that aviation net supply costs at Express were down 7.7%.
Express revenues for the period were down 5.7% for the second quarter to €5.7bn but EBIT improved 6.9% to €730m.
"As in previous years, we countered the development in volumes by prioritising cost discipline, improving productivity and leveraging network flexibility," the company said of its Express division's performance.
DHL Group chief financial officer Melanie Kreis said: "In the second quarter, trade conflicts and geopolitical tensions increased, impacting global economic dynamics. We anticipate continued volatility in the global economy in the second half of the year.
"Our focus on efficiency improvements and growth markets is paying off in this situation. We have adjusted our capacities to the volume development and achieved structural cost improvements.
"This combination has significantly contributed to earnings growth. We are working to further improve our efficiency and leverage growth opportunities in the current environment. Our diversified portfolio provides stability."
Looking at market developments, DHL said volume development in B2B had been volatile across weeks and tradelanes throughout the quarter. It expects slower volume momentum in airfreight but no significant decline or modal shift.
The company added that lower volume does not indicate widespread front loading during the second quarter.
Meanwhile, on the impact of the US ending de minimis exemption for shipments from China and Hong Kong, the company said this was the only sub-segment with a "significant reduction in volumes".
