DHL latest report: rapid growth in air freight revenue

Due to a capacity shortage in the second quarter of this year, Deutsche Post DHL is the latest company to report a surge in air freight revenue.

The German express and parcel giant’s air freight business revenue in the second quarter increased 57% year-on-year to 1.8 billion euros, and gross profit increased 42.4% to 339 million euros, but air freight volume fell 13.7% to 433,000 tons.

Freight forwarders said that the main reason for the decline in freight volume was the decline in freight volume in the global market due to the epidemic. Trade routes to China and transatlantic goods are particularly affected.

The increase in revenue and profit is due to the "extreme shortage of transportation capacity" and the resulting increase in air freight.
The company said: "DHL Global Cargo can ensure cargo capacity for customers in an early stage in a very tight market, resulting in strong gross profit per ton, so the gross profit of air cargo has increased significantly."

The revenue of the entire freight business in the second quarter increased by 10.4% year-on-year to 4.2 billion euros, and gross profit increased by 53.2% year-on-year to 190 million euros.

Despite the decline in production, revenue and profit growth have not been significant. For example, despite a 22% drop in cargo volume, Kuehne+Nagel’s air cargo revenue increased by 15% year-on-year.
Expeditors’ air freight volume fell by 10% in the second quarter, but revenue increased by 93.4%. DSV Panapina also reported this trend, although its year-on-year data was affected by the acquisition of Panapina.Due to the good performance, DP DHL Group issued new profit guidance-revenue in the second quarter increased by 3.1% year-on-year to 16 billion euros, operating profit increased by 18.6% year-on-year to 912 million euros, and net profit increased by 14.6% year-on-year to 5.25 Billion euros.

The company stated that its wide geographical distribution and "comprehensive portfolio of logistics solutions-from global express, air and sea transportation to warehousing and e-commerce solutions, as well as German postal and parcel services" means that compared with other companies, the The company is in a better position to overcome the crisis.

It also highlights the ongoing digital transformation of business processes and customer solutions, such as through the use of data analysis and automation.

"This strong performance is due to the measures taken by the group in the early stages to adjust its capabilities in a flexible manner to adapt to changing demand conditions and ensure the availability of its own flight capabilities.

"At the beginning of the second quarter, the performance of express, air, sea and warehousing businesses was particularly affected by the pandemic prevention measures implemented in Europe and North America.

"For example, in the further development of the second quarter, the time-limited international express delivery volume began to recover, which brought the express delivery department to last year's level in the first half of this year."

The company currently expects its operating profit to reach 3.5 billion to 3.8 billion euros by 2020.