DHL's forwarding division grows airfreight revenue by 30.4% to 1.5 billion euros

According to aircargonews.net, DHL’s freight forwarding division increased its airfreight revenue in the third quarter by 30.4% year on year, to 1.5 billion euros. Airfreight gross profit rose 28.4% to 321 million euros. Airfreight volumes grew 12%.

All three indicators rose, but the result comes with a caveat. Some volumes that the forwarding division could have handled moved to DHL’s express service. These shipments were not counted in the forwarding division’s volumes. The article does not say whether the group would have won them without an express product.

What the company reported

The publication summarises DHL’s quarterly results and highlights two trends in them: growth in the forwarding airfreight business and the shift of some cargo to express.

DHL reported higher airfreight revenue, profits and volumes in the third quarter, but some potential volumes moved over to express.

From aircargonews.net

All figures in the article refer to the forwarding division and compare with the third quarter of last year. The source does not say how many shipments moved to express, on which routes or why. The available text also gives no breakdown by region or route.

What it means for the market

Revenue rose 30.4% while volumes grew 12%. Revenue grew faster than volumes, so on average each unit of volume brought DHL more revenue than a year ago. The source does not explain why: whether transport itself became more expensive, the cargo mix changed or the share of higher-priced routes grew. This conclusion follows only from the ratio between the two figures.

Gross profit grew slightly more slowly than revenue: 28.4% against 30.4%. This means gross profit as a share of revenue fell slightly. These figures do not show how this affected the profitability of the business as a whole.

The shift of some cargo to express shows that shippers have a choice within a single group. When a shipment suits an express service, an integrator (a company that runs its own door-to-door network and sells the whole delivery as one service) can take it away from the forwarding channel. The source does not say which cargo moved to express. The DHL case therefore points to redistribution within the group, not to a trend among independent forwarders.

Background: third-quarter results

Other major players also reported third-quarter growth, though on different measures. On 4 November, AWB Daily reported that Expeditors, a US-based freight forwarder, increased its airfreight volumes by 13% in the third quarter. This is almost the same pace as DHL’s 12%.

Carrier AF KLM Cargo, the cargo arm of Air France-KLM, reported revenue rather than volumes: its third-quarter revenue rose 25.2% to 677 million euros.

Rates also rose on individual routes. On 3 November, AWB Daily reported that airfreight rates from Hong Kong to North America rose 38.7% year on year. This is a single route and a different period, so the figure shows that rates rose on some routes but does not explain DHL’s 30.4% revenue growth.