DHL Group's Q4 Airfreight Revenue Drops 32.5%, Reflecting Market Challenges

DHL Group’s airfreight volumes in the fourth quarter of 2023 continued to suffer from reduced air cargo demand, but the quarter was a marked improvement on earlier in the year.

Fourth quarter airfreight volumes were down 3.6% year on year to 433,000 tons. Year on year, this compares to -12.2% in the third quarter, -13% in the second quarter and -18.7% in the first quarter.

However, fourth quarter airfreight revenue in the Global Forwarding, Freight (GFF) division declined 32.5% year on year to €1.5bn as rates continued to weaken. Gross profit was also down 45.4% to €230m.

Overall, the Group recorded revenue of €21.2bn in the fourth quarter, dropping 10.2% year on year.

Full-year results

Full-year airfreight revenue declined 42.2% year on year to €6bn as volumes and rates declined.

Airfreight volumes for the year were down 12.1% to 1.4m tons. This compares with an 11.2% decline to 1.9m tons at rival Kuehne+Nagel.

The GFF division recorded a 36.1% drop in revenue to €19,3bn in 2023. Reflecting on the full year 2023 results for the GFF division, DHL Group said lower freight volumes and normalising freight rates were a challenge.

“Market volumes at DHL Global Forwarding, Freight were down compared to the previous year due to weak demand but stabilized over the course of the year,” said the DHL Group. “As expected, air and ocean freight rates continued to normalize. In the European road freight market, the cyclical decline in demand continued. Costs remained at a high level due partly to increased diesel and vehicle prices as well as staff costs.”

DHL Group achieved revenue of €81.8bn for the full year.

Tobias Meyer, DHL Group chief executive, said: “The year 2023 was characterized by a weak global economy and, above all, weak global trade. Even under these conditions, we achieved our targets for the year.

“Our high profitability allows us to continuously invest in our network, sustainability, digitalization and our e-commerce capabilities and to further improve quality for our customers. Major uncertainty factors such as volatility in demand and geopolitical crises will remain with us in 2024. However, we are very well positioned for the opportunities and challenges of 2024.”

DHL Group expects an operating profit of €6-6.6bn in 2024.

The Group confirmed this week that it does not intend to make an offer to buy DB Schenker.