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Airfreight squeeze hands DHL Express €100m earnings boost
DHL's airfreight revenues jumped 30.4% to €1.5bn in Q3 as capacity tightness handed its express unit a €100m earnings lift and pushed heavier urgent cargo into the express network.
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Key points05
- DHL forwarding Q3 airfreight revenues rose 30.4% year on year to €1.5bn; volumes up 12% to 497,000 tonnes
- Airfreight capacity constraints added around €100m to DHL Express earnings; express ebit rose 50% to €1bn
- DHL Express launched Heavy Weight Express (HWX) for shipments up to 1,000 kg per piece and 3,000 kg per shipment
- Kuehne+Nagel airfreight revenue grew 38%; DSV grew 16.6% despite a 3% volume drop
- DHL Group raised its full-year ebit forecast from €6.5bn to €7bn
DHL's forwarding division grew third-quarter airfreight revenues 30.4% year on year to €1.5bn, while capacity constraints in the airfreight market handed its express arm an extra €100m in earnings.
The numbers show one mechanism at work across the group: when belly and freighter capacity runs short and rates climb, freight moves — and some of it moves to whoever can guarantee a delivery date. DHL's Q3 results, published this week, capture both sides of that trade.
Airfreight gross profits at the forwarding division rose 28.4% to €321m, and volumes climbed 12% to 497,000 tonnes. Demand out of Asia drove the tonnage, DHL said, and higher airfreight rates did the rest. Overall forwarding revenues improved 23.4% to €5.6bn, with operating profits up 32.7% at €259m.
The company said the growth also reflects the successful pass-through of cost and fuel inflation to customers. "The [forwarding] division helped customers adapt transport routes to changing trade flows and maintain reliable supply chains," DHL said in a press release.
Why rates and volumes are both climbing
Market-wide airfreight rates and volumes have risen this year on a stack of factors:
- higher fuel costs
- a surge in demand for data centre-related goods
- overall market strength
- the conflict in the Middle East
- capacity tightness from certain markets
That mix — strong demand meeting constrained capacity — is unusual. Normally one side of the equation gives. This year neither has, which is why forwarders are reporting revenue growth far ahead of volume growth. DHL's 30.4% revenue gain on 12% more tonnage tells you rates did most of the work.
What does the capacity squeeze change for shippers?
It changes their routing options and, increasingly, their mode choice. DHL Express reported a 19.2% increase in Q3 revenues to €7bn, with ebit up 50% to €1bn — partly because belly capacity elsewhere is tight.
"DHL Express benefited from a continuing gradual rise in weight transported throughout the network. Capacity constraints in the airfreight market also had a positive effect on earnings of around €100m," DHL said. "The positive earnings performance from increased capacity utilisation was additionally supported by effective cost and yield measures."
Time Definite International daily shipment weight rose 9.7% year on year as the express division deliberately targets heavier cargo.
Earlier this year, Mike Parra, DHL Express's chief executive for Europe, told Air Cargo News that the shift toward heavier shipments partly reflects e-commerce platforms abandoning the integrators for cheaper bulk transport and 'local hero' last-mile networks, lifting the share of heavier shipments in the mix.
But geopolitics has accelerated the trend. With the war in Iran adding unpredictability, a growing number of urgent heavier items now flow into the express network, drawn by speed, certainty and an uncomplicated pricing model.
DHL is building for it. At the start of the year, as part of a strategy to refocus on industrial customers, DHL Express launched its Heavy Weight Express (HWX) service, handling shipments of up to 1,000 kg per piece and 3,000 kg per shipment.
How the forwarders compare
DHL's 30.4% airfreight revenue growth sits between its two main rivals:
- Kuehne+Nagel: airfreight revenue up 38% year on year in the quarter, volumes up 10%
- DSV: air forwarding revenues up 16.6%, despite volumes falling 3%
- DHL Global Forwarding: revenues up 30.4%, volumes up 12%
DSV's result is the outlier. It grew revenue while losing tonnage — a pure rate effect, and a sign it prioritised yield over share. Kuehne+Nagel and DHL both won volume and price.
The guidance upgrade behind it
Earlier this year, DHL Group raised its full-year operating profit outlook on the back of the express division's strong performance and expectations for a good peak season. The group now expects ebit of €7bn for the year, up from its previous forecast of €6.5bn.
For shippers, the practical read is straightforward. Tight airfreight capacity is pushing urgent, heavier freight toward integrators — and DHL has priced a product around exactly that cargo. If Middle East disruption and Asia demand keep capacity short into peak season, expect the rate premium and the express shift to persist into Q4.
Source: Google News: air cargo
More from Tom Whitfield
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Market editor covering companies, deals and strategy in Ocean and air freight, container shipping at Waybill Wire.
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