Air and ground express firm DHL Express announced September 27 a 5.9% general rate increase on shipments moving to and from the U.S., effective January 1, 2020.
The increases are for tariff, or published, rates. Contract rates will differ depending on the specific customer. However, contract pricing in the express delivery business is influenced by the level of tariff rates in effect at the time. In addition, the actual tariff rate charged for transporting a shipment will vary depending on the shipment’s “profile,” such as weight, dimensions, length of haul and any special handling. DHL Express’ 2020 service guide, which will contain more detailed pricing information, has yet to be made public.
DHL serves the U.S. from international markets only. It ceased domestic U.S. pick-ups and deliveries in January 2009. DHL serves more than 220 countries and territories.
Rival FedEx Corp. (NYSE:FDX) has already announced its 2020 rate structure, with the average tariff rate increasing by 4.9%. UPS Inc. (NYSE:UPS), another DHL rival, has yet to disclose its 2020 rates.
Separately, global trade activity is likely to decline from already-muted levels through November, according to the latest version of DHL’s global trade outlook, which was published September 26. The overall index fell by one point from the last version, settling at 47. This indicates that global trade will continue to lose momentum over the next three months.
A reading of 50 is the baseline for growth. Of the seven countries that were canvassed, only Japan and the U.K. showed readings above 50. The United States, China, India, Germany and South Korea all posted negative readings, according to the report. The seven countries, and the 10 industries profiled, account for about three-quarters of all global trade.
Airfreight accounted for most of the overall decline, falling 4 points from the last reading in June to 45. Ocean freight remained steady at 48, the report found. Chinese airfreight activity showed the most glaring weakness, down 8 points to 43. Japanese ocean freight, by contrast, gained 6 points to 55 due to a strong outlook for raw materials exports.
The overall weakness was attributed to the usual suspects: The U.S.-China tariff battle, uncertainties over Brexit, and weakness in European economies, especially those like Germany that rely on exports to China.
The one bright spot is that the pace of decline slowed considerably from June, when the broad index toppled eight points to 48.