The logistics giant DHL managed to slightly increase both revenue and profit at the start of the year, despite ongoing global uncertainties about economic development.
Even the company's problem child, the German mail and parcel business, contributed positively, benefiting from a postage rate hike. However, the trade conflicts triggered by US President Donald Trump were already having an impact early in the year: "US tariff policy only gained new momentum at the beginning of April--but customer uncertainty was already clearly noticeable in the first quarter," CFO Melanie Kreis said on Wednesday. Nevertheless, the Bonn-based company reaffirmed its forecast: For 2025, DHL expects an operating profit (EBIT) of six billion euros or more.
"The economic environment in the first quarter of 2025 was shaped by US tariff and trade policy, as well as general economic caution," DHL CEO Tobias Meyer summarized. At the start of the year, the Bonn-based group increased revenue by 2.8 percent year-on-year to 20.8 billion euros. Operating profit (EBIT) rose by 4.5 percent to 1.370 billion euros, with DHL posting a net profit of 786 million euros (compared to 740 million euros the previous year). Analysts had expected revenue to average around 20.8 billion euros and operating profit of about 1.3 billion euros.
Ironically, it was the struggling Post & Parcel Germany division that showed significant growth. The increase in postage rates at the turn of the year, mail-in voting, and a growing parcel business all boosted the division. "The new prices in the mail business have delivered the expected and urgently needed contribution to results," Kreis said. However, the problems are far from solved: "Costs have risen sharply and continue to rise, mail volumes have already dropped significantly, and the accelerated volume decline is continuing here as well." Meyer has ordered cost-cutting measures for the division, with 8,000--or about four percent--of the roughly 190,000 jobs set to be cut. Overall, Meyer aims to reduce costs across the group by more than one billion euros by 2027, a target he reaffirmed.
Beyond the traditional mail business, increasing customer uncertainty due to US tariffs is weighing on logistics providers with global distribution networks. "Volatility is currently very high, even though in our experience, global trade is more resilient than many believe," Kreis said. "But one thing is clear: trade patterns are changing, and the pace of change will likely pick up in the coming weeks." Still, trade continues even with tariffs: "It just becomes more expensive and complex."
DHL's competitors are also grappling with the economic fallout from Trump's policies. The world's largest parcel delivery service, UPS, announced on Tuesday that it would cut around 20,000 jobs in response to the uncertain environment and to rein in costs. US rival FedEx slashed its outlook last March, including another cut to its profit forecast. Germany's largest container shipping company, Hapag-Lloyd, reported that 30 percent of bookings from China to the US had been canceled amid the trade dispute sparked by Trump.
(Reporting by Matthias Inverardi; Edited by Myria Mildenberger; For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)
