DP-DHL has reported preliminary Q4’20 EBIT of 1.96 billion euros ($2.39 billion) which compared to analysts’ estimates of 1.38 billion euros according to S&P Global market Intelligence data and 10% above the firm’s guidance for the full year. The firm also now expects EBIT in 2021 to be more than 5.4 billion euros after its prior best-case “V-shaped recovery” guidance of 5.3 billion euros.
The parcel and express delivery operations led the way in terms of volume growth while a shortage of capacity allowed an increase in rates too. The freight forwarding business also improved by 14% at the revenue line though higher costs for both ocean freight and for airfreight, may be the reason for a cut in the profitability of both forwarding and supply chain. Air freight capacity utilization had already reached a record of 58.2% in November, Panjiva’s analysis of IATA data shows.
The logistics industry disruptions caused by the demand / supply imbalance are likely to continue during the first quarter of 2021, as discussed in Panjiva’s research of Jan 5., so while shop-from-home may continue to help package businesses the freight operations may continue to face challenges.
The need for an upgrade was driven in part by the continued acceleration in global trade activity even late into 2020. Panjiva’s data shows that U.S. seaborne imports handled by DP-DHL climbed 51.8% year over year in December, increasing pace from 47.1% in November and 39.8% in October. The growth rate in shipments from China slowed slightly to 50.6% in December from 58.0% in November while shipments from Asia ex-China climbed 64.7% in December after a 44.5% jump in November. The surge in shipments from Asia ex-China included a 663% surge in imports of solar panels for First Solar among others.
Source: Panjiva
The expansion put DP DHL well ahead of other major quoted, globally diversified freight forwarders with similar growth seen by Kerry’s Apex at 53.8% and Expeditors with growth of 47.6%. At the other end of the scale both FedEx and DB Schenker experienced slower rates of development. FedEx shipments expanded by 8.6% year over year in November, marking a slowdown from 12.3% a month earlier while shipments handled by DB Schenker declined by 2.9%.
Source: Panjiva