News / DHL sees H1 profits plummet, but XPO gains momentum in North America

There was a mixed bag of first-half results for two global logistics operators this week: as plummeting Q2 profitability pounded DHL, XPO saw positive momentum in North America.

At an investors’ call yesterday, DHL Group CFO Melanie Kreis may have reported that, “in short, [DHL] met all expectations” for the six months to June, but the numbers did not make overly inspiring reading.

Of its four divisions, three reported diminishing profits – cash cow Express seeing a 27.1% decline, to €1.3bn ($1.4bn), Global Freight Forwarding fell 30.2%, to €542m and eCommerce dropped 21.4%, to €125m.

And there were declining H1 revenues, Express was down 1.4%, to €12.2bn, and Forwarding down 8%, to €9.5bn, with Ms Kreis pointing to the absence so far this year of a “broad-based” recovery in global trade.

“Air and ocean freight volumes further improved in the second quarter from a low starting level,” she noted.

“We are also seeing a modest improvement in B2B volumes at Express, but not yet a significant acceleration. Accordingly, the utilisation of our Express network is still not optimal at the moment.”

Given the present market, the 21.4% decline in its eCommerce unit’s profitability on the back of a 9.5% uptick in divisional revenues was certainly notable.

Added to which, Ms Kreis suggested the unit was not looking strong moving into the second half of 2024 – eCommerce is relatively small, generating €3.3bn, compared with Express’s €12.2bn, in H1, but the news was ‘certainly not good’, one analyst said.

The one bright spot, however, was in its Supply Chain business, which increased both revenue (4.1%, to €8.7bn) and profit (7.2%, to €535m).

Confirming its forecast for group Ebit of between €6bn and €6.6bn, reflecting the €6.3bn it posted last year, the company said it “expects typical positive effects from peak season”.

Turning to XPO, the situation in North America’s less-than-truckload market looks a little more promising. The company posted a 58.6% increase in profits, to $368m, for the region.

That significant upswing more than made up for the 33% drop in profitability in its Europe segment, which generated just $6m profit on the back of $1.6bn in revenue, with consolidated revenues up 7.1%, to $4.1bn, and a 103% profit uptick, to $335m.

CEO Mario Harik said: “In North American LTL, we continued to deliver service at record levels, with the best damage claims ratio in our history, at 0.2%.

“Our strong performance demonstrates the steady progress toward becoming the LTL service leader in North America. We’ll continue to build our service offering, invest in capacity ahead of demand and operate more efficiently.”