Lower air freight volumes take away Q2 FY23 revenue for K+N and DSV

In the second quarter of 2023, two leading airfreight forwarders Kuehne+Nagel (K+N) and DSV faced a decline in airfreight volumes, revenues, and profits. K+N saw a decrease in volumes by 15.5%, amounting to 482,000 tonnes (Y-o-Y), and in air net turnover by 48% to 1.6bn Swiss Franks (Sfr), while earnings before interest and tax (EBIT) also declined sharply by 65% to Sfr 139m.

On the other hand, DSV also experienced similar challenges with volumes declining by 21.3% to 316,456 tonnes, air revenues slipping down by 51.4% to 12.2 billion Danish Krone (Dkr), and gross profit moving downside by 29.2% to Dkr 3.6bn.

Kuehne+Nagel’s earnings

Contrary to K+N, who attributed the volume decline to the general market performance, DSV said that the steep fall of the airfreight volumes handles was due to a strategic focus on high-yielding verticals.

K+N’s CEO, Stefan Paul, acknowledged the market trend but reassured stakeholders of their strong focus on delivering high-quality logistics services and maintaining a customer-centric approach. The company’s efforts to control costs became more evident during the second quarter of 2023, as their cost reduction programs successfully reduced the cost per 100kg by 9% compared to the same period the previous year. K+N also said that they’re in the process of acquiring Morgan Cargo – a perishable logistics specialist.

The slowdown in the global air and sea freight markets during the first half of 2023 was driven by macroeconomic factors, a normalization of consumer behavior post-pandemic, and a reduction in inventory across several sectors. Export volumes from Asia Pacific, particularly in retail and consumer electronics, experienced the weakest demand development.

DSV Earnings

To adapt to market conditions, DSV’s performance was affected by the normalization of supply chains, leading to a shift in volumes from air to sea freight as bottlenecks cleared up. Despite the challenges, DSV expressed confidence in its ability to navigate the evolving market conditions and anticipated gradual improvement in global trade volumes over the next quarters.

The outlook for the airfreight industry remains uncertain, but both companies continue to adapt their strategies to ensure sustainable profitability in the changing market landscape.

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