DENMARK-HEADQUARTERED forwarder DSV says airfreight revenues, volumes and gross profits all took a hit last year due to improved ocean shipping operations, high inventories and a weak consumer market.
DSV reported a 44.1 per cent year-on-year decline in air revenues in 2023 to DKK50.6 billion (US$7.3 billion), gross profit for the year was down 27.9 per cent to DKK13.4 billion and volumes fell 16.2 per cent to 1.3 million tonnes, reports London's Air Cargo News.
Explaining the declines, the world's third-largest air forwarder said: 'Demand for both air and seafreight continued to be impacted by the macroeconomic slowdown and global inventory correction.
'From the second half of 2022 through most of 2023, supply chain congestion eased up and consumer spending made a shift from material goods towards services.
'Some companies found themselves with too much inventory, and an ongoing correction lowered global trade and the demand for transportation.'
DSV said that the negative volume trend was most significant for airfreight, which was affected by improved reliability and lower rates in the seafreight market and return of belly capacity.
The increased air cargo capacity led to a decline in airfreight rates over the first nine months.
However, DSV reported improving market conditions as the year progressed.
In the final quarter of the year, air revenues declined by 33.8 per cent year on year to DKK12.5 billion, gross profits were down by 25.4 per cent to DKK3 billion and volumes dropped 8.4 per cent to 337,000 tonnes.
The company said that rates out of Asia increased in the final quarter of the year due to growth in cross border e-commerce traffic.
Looking ahead, DSV is expecting the air and sea markets to grow by around 3-4 per cent in 2024. Gross profits are expected to stabilize around or slightly below fourth quarter levels.
The overall business saw revenues decline 36 per cent year on year to DKK150.7 billion, earnings before interest and tax slipped 29.7 per cent to DKK17.7 billion and net profit was down 29.8 per cent to DKK12.4 billion.
SeaNews Turkey
DSV reported a 44.1 per cent year-on-year decline in air revenues in 2023 to DKK50.6 billion (US$7.3 billion), gross profit for the year was down 27.9 per cent to DKK13.4 billion and volumes fell 16.2 per cent to 1.3 million tonnes, reports London's Air Cargo News.
Explaining the declines, the world's third-largest air forwarder said: 'Demand for both air and seafreight continued to be impacted by the macroeconomic slowdown and global inventory correction.
'From the second half of 2022 through most of 2023, supply chain congestion eased up and consumer spending made a shift from material goods towards services.
'Some companies found themselves with too much inventory, and an ongoing correction lowered global trade and the demand for transportation.'
DSV said that the negative volume trend was most significant for airfreight, which was affected by improved reliability and lower rates in the seafreight market and return of belly capacity.
The increased air cargo capacity led to a decline in airfreight rates over the first nine months.
However, DSV reported improving market conditions as the year progressed.
In the final quarter of the year, air revenues declined by 33.8 per cent year on year to DKK12.5 billion, gross profits were down by 25.4 per cent to DKK3 billion and volumes dropped 8.4 per cent to 337,000 tonnes.
The company said that rates out of Asia increased in the final quarter of the year due to growth in cross border e-commerce traffic.
Looking ahead, DSV is expecting the air and sea markets to grow by around 3-4 per cent in 2024. Gross profits are expected to stabilize around or slightly below fourth quarter levels.
The overall business saw revenues decline 36 per cent year on year to DKK150.7 billion, earnings before interest and tax slipped 29.7 per cent to DKK17.7 billion and net profit was down 29.8 per cent to DKK12.4 billion.
SeaNews Turkey
