INCREASED demand for air freight out of asia Pacific (APAC) helped Danish forwarding giant DSV up its air cargo volumes in the second quarter.
DSV's air freight volumes increased 10 per cent year on year in the second quarter to 349,076 tonnes compared to 316,456 in the same period last year.
'The increase was mainly driven by improved export from APAC, which was positively impacted by growing textile and pharma customer volumes out of China and sea-to-air conversion in the Indian subcontinent,' said DSV in its H1 2024 interim financial report. 'We estimate that we have grown faster than our addressable market on air freight.'
The forwarder noted strong volume growth and market share gains in its 'addressable market' (that is excluding e-commerce and perishables).
Reported air freight revenue was 9.9 per cent up, while air freight gross profit fell 17.4 per cent due to lower gross profit yields.
Overall, the Air & Sea division recorded an 8.1 per cent increase in revenue for the quarter compared to the same period last year 'due to increased activity and sea freight rates'. Gross profit for the quarter was down 9.3 per cent.
'The decline in gross profit compared to last year was caused by lower gross profit yields in both air and sea,' said DSV.
While freight rates have been on the up this year in both air and ocean, there tends to be a lag between carriers putting up their prices and forwarders being able to pass on these increased costs to their customers, especially on contract deals.
EBIT before special items for the quarter was down 18.2 per cent. This was attributed to lower gross profit, which was partially offset by a reduced cost base compared to last year.
DSV noted gross profit was stable for air freight and sea freight and said this indicated 'a steady operational performance in a competitive and fluctuating market'.
The company further stated: 'While the situation in the Red Sea has not yet materialised in our financial results, it is expected to have a slightly positive impact in the second half of 2024.'
Across the whole group, DSV Group saw revenue increase nine per cent, a decline in gross profit of four per cent and a 12.4 per cent decline in EBIT before special items compared to the same period last year.
Said DSV chief executive Jens Lund: 'In a challenging environment, we delivered a strong financial performance in Q2 2024 driven by positive volume growth and stabilisation of gross profit per unit in the Air & Sea division.'
DSV is now among the final selection of companies who are bidding to buy DB Schenker. DSV did not comment on the specific acquisition process in its results commentary but stated: 'M&A will remain central to DSV's strategy, and we believe that the combination of organic and inorganic growth will create a stronger DSV going forward.'
Referring to its NEOM logistics joint venture, DSV said the project is ready to go live but is waiting for final approvals from authorities.
SeaNews Turkey
DSV's air freight volumes increased 10 per cent year on year in the second quarter to 349,076 tonnes compared to 316,456 in the same period last year.
'The increase was mainly driven by improved export from APAC, which was positively impacted by growing textile and pharma customer volumes out of China and sea-to-air conversion in the Indian subcontinent,' said DSV in its H1 2024 interim financial report. 'We estimate that we have grown faster than our addressable market on air freight.'
The forwarder noted strong volume growth and market share gains in its 'addressable market' (that is excluding e-commerce and perishables).
Reported air freight revenue was 9.9 per cent up, while air freight gross profit fell 17.4 per cent due to lower gross profit yields.
Overall, the Air & Sea division recorded an 8.1 per cent increase in revenue for the quarter compared to the same period last year 'due to increased activity and sea freight rates'. Gross profit for the quarter was down 9.3 per cent.
'The decline in gross profit compared to last year was caused by lower gross profit yields in both air and sea,' said DSV.
While freight rates have been on the up this year in both air and ocean, there tends to be a lag between carriers putting up their prices and forwarders being able to pass on these increased costs to their customers, especially on contract deals.
EBIT before special items for the quarter was down 18.2 per cent. This was attributed to lower gross profit, which was partially offset by a reduced cost base compared to last year.
DSV noted gross profit was stable for air freight and sea freight and said this indicated 'a steady operational performance in a competitive and fluctuating market'.
The company further stated: 'While the situation in the Red Sea has not yet materialised in our financial results, it is expected to have a slightly positive impact in the second half of 2024.'
Across the whole group, DSV Group saw revenue increase nine per cent, a decline in gross profit of four per cent and a 12.4 per cent decline in EBIT before special items compared to the same period last year.
Said DSV chief executive Jens Lund: 'In a challenging environment, we delivered a strong financial performance in Q2 2024 driven by positive volume growth and stabilisation of gross profit per unit in the Air & Sea division.'
DSV is now among the final selection of companies who are bidding to buy DB Schenker. DSV did not comment on the specific acquisition process in its results commentary but stated: 'M&A will remain central to DSV's strategy, and we believe that the combination of organic and inorganic growth will create a stronger DSV going forward.'
Referring to its NEOM logistics joint venture, DSV said the project is ready to go live but is waiting for final approvals from authorities.
SeaNews Turkey
