Deutsche Post DHL says global trade outlook continues to improve

Düsseldorf (Reuters): The outlook for air freight remains robust after its best year for business since 2010, but demand for ocean-going cargo is harder to predict, Deutsche Post DHL said yesterday (28 March).

The German company, one of the world’s biggest postal and logistics groups, said its Global Trade Barometer for March, a new indicator which uses logistics data to forecast demand for the next three months, rose to 66 points in March from 64 points in January.

A value above 50 indicates positive growth for global trade over the next three months.

Trade tensions pose a risk to the outlook while Brexit also requires adjustments. However, Deutsche Post could reap business opportunities from Britain’s departure from the European Union, an executive told Reuters in an interview.

“The main issue for us is changes to customs regulations,” Tim Scharwath, head of the group’s global forwarding and freight division, said. “But as a logistics expert, that could also present us with opportunities and we will invest in staff and systems if we need to.”

The group is not yet seeing any impact on its freight business from global trade tensions.

“A trade war between the EU and the U.S. would not be good for anyone, a dispute between the U.S. and China would also be bad. But until now we have not seen any effect from the debate on trade restrictions,” Scharwath said.

His comments echo those of Lufthansa’s air freight arm, Lufthansa Cargo, which saw profits jump last year and said it was optimistic for 2018.

Scharwath said 2017 was the best year for air freight since 2010. “We are confident that this trend will continue in 2018. The development of ocean freight is harder to predict,” he said.

Deutsche Post’s freight division experienced difficulties over the last couple of years due to a failed IT restructuring and Scharwath, a former manager at Kuehne + Nagel, was brought in to improve the unit’s fortunes. He said he was concentrating on improving volumes, and profit margins on existing volumes. “When global economies are doing well, it’s easier, but you can also grow when the market drops,” he said.