News / DB chief praises Schenker H1 performance amid group's poor results

© DB Schenker

DB Schenker has again propped up parent Deutsche Bahn’s poor half-year results, despite falling rates.

Sales at DB Schenker fell 6.6%, to €9.4bn ($10.2bn), Ebitda fell 10.2%, to €908m, while Ebit fell nearly 17%. to €520m. Schenker accounted for 42% of DB’s total sales.

DB said the process of selling Schenker was continuing, but added: “A sale only takes place if it is economically advantageous for the DB group.”

Only two bidders now remain, after Saudi shipping company Bahri pulled out, leaving just DSV and Scan Global Logistics parent CVC Partners.

DB Schenker said its operating earnings were weaker, “driven primarily by the development of freight rates in air and sea freight, but remained significantly above the pre-Covid level”.

The German forwarder said the European land transport market “is faced with stagnating demand, but shows dynamic price developments in certain areas”.

It said there was volatility in the market, due to inflation and capacity constraints, with smaller companies which were unable to pass on costs to shippers exiting the market, a situation exacerbated by the driver shortage.

In North America, demand for surface transport “remains well below 2022 levels, resulting in historically low prices”, it said. “The operating costs are fixed and still under inflationary pressure in almost all areas.”

However, it added that “there are clear signs that the market has bottomed-out”.

In air freight, Schenker was not able to capitalise much on the new ecommerce boom, while the traditional market was weak: Schenker volumes were up only 1%.

It commented: “Along with the growth triggered by the e-commerce boom, [there were] regionally extreme differences in demand.

“We see imbalances in available capacities globally increasing freight rates, albeit regionally as well very different characteristics and directions.”

Overall, it said, air freight had seen a “slight increase, in line with the non-ecommerce market, with a low share of the rapidly developing, low-price new e-commerce market”.

It added: “Air freight rates outside of Asia Pacific, where DB Schenker’s share is low, were constant or declining.”

It noted higher demand in sea freight, while the Red Sea challenges were causing freight rates to rise. Its volume rise of 1.5% was slightly below the market average, it said.

Deutsche Bahn said: “The logistics subsidiary, DB Schenker, continued to perform very well in the first half of 2024, despite the further normalisation of freight rates in air and ocean freight.”

It noted that DB Schenker’s earnings were still more than twice as high as the pre-Covid level.

DB CFO Levin Holle said: “Thanks to a successful efficiency programme, DB Schenker has a good chance of leveraging further potential in earnings in the future.”

DB Cargo, meanwhile, saw 10.2% less tonnage, and revenues fell €106m, to €2.8bn, with an operating loss of €261m.

Overall, the DB group made an operating loss of €677m – “more than €950m worse than in the first half of 2023” – but it said it would achieve an operating profit for the full year.