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DHL eyes freight recovery after subdued 1H

Air and ocean volumes show modest improvement, but profit shrinks

Tractors deposit containers at DHL’s international logistics center in Poznan, Poland. (Photo: DHL)

DHL Group said Thursday that operating profit fell 20.5% in the second quarter. But it is on track to meet full-year targets as sluggish economic activity weighs on international trade and freight transportation. 

DHL’s (DXE: DHL) revenue bumped up 2.7% to 20.6 billion euros ($22.3 billion) while earnings before interest and taxes slumped to $1.5 billion, in line with internal projections. Operating profit, however, was significantly better than the $857 million in the second quarter of 2019, before the Covid crisis.

A persistently sluggish global economy has made it difficult for the German express parcel and logistics provider to improve results in recent quarters, but management forecasts a recovery in the second that will create tailwinds into next year. 

Although industry-wide air and sea freight demand and rates grew substantially during the first half of the year, the gains were largely due to businesses shipping orders earlier than normal. This was due to uncertainty related to Red Sea shipping delays, a looming dockworkers strike in the U.S. and low inventory levels rather than an economic upturn. One school of thought is that retailers pulled forward international volumes to ensure delivery for busy holiday shopping periods later this year, which could result in a less robust peak shipping season.


“Air and ocean freight volumes further improved in the second quarter from a low starting level. However, we are not observing a broad-based recovery of global trade yet. We are also seeing a modest improvement in B2B volumes at Express, but not yet a significant acceleration,” said CFO Melanie Kreis in the company’s earnings announcement. “Accordingly, the utilization of our Express network is still not optimal at the moment. However, as a result of our balanced cost and capacity management, we are in good shape even in a weak economic environment. And thanks to our unique logistics portfolio we are well prepared for when global trade regains momentum.”

UPS and FedEx have also struggled with lower parcel volumes in the past couple years. UPS last week reported a 29% drop in operating profit for the second quarter. FedEx posted a modest 1% revenue gain in its quarter that ended May 31 after six quarters of revenue declines.

Better cost and capital expenditure management helped DHL navigate the freight market trough. The logistics group trimmed investment spending 10.5% down to $685 million from the second quarter of 2023 to prop up earnings and declining cash flow

DHL Express shipment volumes dipped year over year during the second quarter, but a 1% increase in B2B shipments was a positive sign. Productivity improvements and optimizing network capacity enabled the division to minimize profit decline. Last week, DHL announced plans to build a second European maintenance hangar in Spain to ensure it has available aircraft to meet growing airfreight demand. The company’s in-house airline also extended the lease on its largest global hub at Leipzig/Halle airport for an additional 15 years, to 2053, and said it would invest to expand parking space for freighter aircraft over the next few years.


The Global Forwarding unit registered a slight increase in revenue. For the second consecutive quarter, the division recorded mid-single-digit growth in air (+5%) and ocean (+6%) freight volumes against a low comparison base in 2023 as customer orders started to line up with underlying demand after a long period of destocking. 

DHL said the Supply Chain division continued to benefit from growth trends in e-commerce and new sourcing patterns around the world, with new contracts and e-commerce volumes contributing to higher revenue in nearly all regions and sectors. It was the only division with a positive operating profit, eeking out a 2.5% gain. Revenue growth of 10.5% in the eCommerce division far exceeded the performance of the other units. DHL’s fulfillment arm benefitted from structural growth in e-commerce, which more than offset sluggish consumer spending overall.

DHL retained full-year guidance for EBIT of $6.5 billion or more, saying it expects a good peak season to boost financial results in the second half. It also forecast 2026 operating profit to eclipse $8.1 billion. 

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Twitter: @ericreports / LinkedIn: Eric Kulisch / ekulisch@freightwaves.com

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, Eric was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at ekulisch@freightwaves.com