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DHL Global Forwarding freight volumes dip despite late surge in demand

DHL Global Forwarding saw its full-year 2016 air freight volumes dip by 1.3 per cent year on year to two million tonnes despite demand rising 5.7 per cent to 578,000 tonnes in the fourth quarter of last year, coinciding with an industry-wide spike in demand.

The result comes as the company has been running a selective market strategy where it turned away non-profitable volumes until earlier this year, reported London's Air Cargo News.

Meanwhile, rivals Kuehne+Nagel and Panalpina reported increases in air freight demand of 4.3 per cent to 1.3 million tonnes and 10 per cent to 921,400 tonnes respectively.

In line with the decrease in demand, lower air freight rates, lower fuel surcharges and currency effects, DHL Global Forwarding's turnover for the segment dived by 12 per cent year on year in 2016 to EUR4.4 billion (US$4.66 billion) and gross profits for the year were down 5.9 per cent to EUR875 million.

Revenues for the overall forwarding division were down by 7.7 per cent to EUR13.7 billion and earnings before interest and tax increased to EUR287 million in 2016 from a loss of EUR181 million in 2015.

"The upward trend was not reflected in revenue performance due to generally still low selling rates in air and ocean freight," the company said. "At the same time, the group experienced a substantial increase in buying rates, which had a negative impact on fourth-quarter gross profit."

There was better news for the overall company, DHL Deutsche Post, where revenues decreased by 3.2 per cent year on year to EUR57.3 billion, yet net profit rose by 61.8 per cent to EUR2.8 billion.