DSV: supply chain constraints will continue next year
DSV expects supply chain constraints and higher prices to continue beyond the traditional peak season.
Talk to Air Cargo News, Jens Lund, COO of the Denmark-based freight forwarder, explained that there were no signs of any problems with shipping or air cargo.
” The Chinese new year [starting February 1]… We don’t think the distress situation will go away by then, ”he said. “There are just too many things that are out of balance. “
He said lingering problems in shipping – schedule delays, port congestion and container shortages – would continue and this would push industries that traditionally use shipping to use the air to maintain supply chains. moving and warehouses stocked.
“As the market is out of balance air freight will always be in demand and of course there is the issue of available capacity – that would then also set the price and at the moment the price is high due to the lack of abdominal capacity. .
While the company noted that the return of passenger traffic is gradually having a positive impact on capacity due to the increased capacity of the belly entering the market, but this mainly concerns regional and domestic passenger flights, and DSV only expects a gradual return of long-haul flights. passenger flights
Lund added that the situation could ease slightly after Christmas, but it could be self-fulfilling and just create more air demand if there is capacity available.
Lund spoke shortly after the company announced its third quarter results.
DSV saw revenue increase 76.2% year-on-year to DKK 49.6 billion, EBIT before special items increased 64.1% to DKK 4.5 billion and profit rose 136.4% to 3.2 billion crowns.
Lund said the rise in profits was in part due to the extra labor and costs involved in each transaction.
“Everything is disrupted, all supply chains are under strain and while a lot of the cargo is moving as it should, there are a lot that are not.
“If we have to move a pallet and find alternative routes, that comes with extra work for us and sometimes the transport costs are higher.
“If we have to tranship or consolidate or find another solution for the customer, that of course comes at a cost. “
Lund was speaking in his new role as Chief Operating Officer as Michael Ebbe was appointed to his former role as Chief Financial Officer.
In his new role, Lund said he has taken care of many of the COO’s responsibilities over the past few years and this move will give him more time to focus on this aspect of the business. .
“It’s not a new theme for me,” he said. “This is something that I have been doing for years, but now I will focus more on this, so I will continue to do mergers and acquisitions and infrastructure and all that in addition to business development in general, so it will be there. goal now, then Michael, he will assume the full-fledged CFO position. “
Regarding mergers and acquisitions, there had been speculation earlier in the year that the company might be interested in German freight forwarder DB Schenker, which is part of the state-owned rail group Deutsche Bahn.
However, Lund said the story had been “a little disproportionate”.
“We have never spoken to politicians and we have not spoken to an executive at DB Schenker or Deutsche Bahn. We are not in dialogue and will not comment specifically.
“But in general our company has a M&A strategy… we have been in transactions for many years and we will continue to be active. “
He added: “The more volume we add, the more we can invest in our platform and this then makes us more competitive and helps us to have a better service offering and higher productivity which then gives a place in the market.
“So that’s the plan we have as a company and I think we’ll continue down this path for at least as long as I’m a part of it.”
DSV’s Q3 air volumes boosted by the acquisition of Agility GIL