News / 'Disastrous' DSV-Schenker merger would 'disrupt European haulage market'

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DSV’s acquisition of DB Schenker could “end in disaster”, as forwarders warn that hostility to the individual firms could lead to a refusal to work with the merged entity.

On Tuesday, DSV cleared a major hurdle to the deal with European Commission (EC) approval, claiming the “transaction would not raise competition concerns, given its limited impact in markets where the companies are active”.

With the EC’s sign-off, all that stands in the way of the agreement being finalised is approval from the US Department of Justice (DoJ).

But sources were swift to tell The Loadstar that DSV may be ‘biting off more than it can chew’ with the deal, one suggesting the merged entity’s ocean freight business “could end up in a complete disaster” were revenues to drop, and claimed the company valuation was “off”.

The source said that while carriers tended to sacrifice smaller forwarders’ cargo in favour of the larger operators in a “super tight” market, the reverse was true in low-demand periods. With the outlook for demand looking muted, and the yields from the pandemic and Red Sea crisis looking to have dried up, the clout DSV would have had from its combined size may be lost just as the deal goes through.

Another forwarder active in the European road freight market told The Loadstar they saw the link-up between DSV and DB Schenker as a potential disruptor in their sphere.

“To be honest, I think should the deal be approved, and should it be finalised, it will be the only major disruptor to European road freight rates over the course of 2025, unless there is some big, unexpected event,” they added.

Even so, they too did not believe the marriage would be one made in heaven, noting hostility towards both operators in the European logistics scene.

“We’ve been speaking to a lot of customers on this deal, and we know there are some that will never do business with DSV, but may do business with Schenker, and there are some that will never do business with Schenker but may do so with DSV.

“The problem this deal brings is that those customers of each individual will not work with the merged entity.”

The source said they expected the merger to prompt a loss of customers, “even if DSV/DB do gain market share” – although DSV has said it expected the agreement to result in a loss of market share.

During DSV’s 2024 earnings results announcement, chief executive Jens Lund said he expected revenues to drop during the integration period.

“If we look at organic growth in an integration period, it’s typically a little bit lower than you would normally achieve. When we buy a company, we typically factor-in that we will lose a little bit of revenue as well.”

However, he added, that “we should be able to do a little bit better” as far as growing the company’s business went.