K+N air volumes rise 10% as DSV reports 3% decline in Q3

Kuehne+Nagel and DSV reported third-quarter results a day apart, on 22 and 21 October, and their air freight volumes moved in opposite directions. K+N handled 619,000 tonnes, up 9.8% year on year¹. DSV handled 560,890 tonnes, down 3%³. Both grew revenue. DSV said elevated ocean rates helped, while K+N's air revenue rose on higher volumes and demand from cloud and semiconductor customers^2, 7. The split says more about market share than about peak season demand.

K+N gains, DSV cuts accounts

K+N's group turnover rose 22% to CHF7.4bn and EBIT rose 53% to CHF435m⁷. Its air division did better still: turnover up 38% to CHF2.4bn, EBIT up 84% to CHF169m, and gross profit up 29% to CHF404m⁷. The air division's conversion ratio, the share of gross profit kept as operating profit, rose to 32.4% from 22.8% a year earlier¹.

K+N credited cloud infrastructure and semiconductor customers and general hard cargo⁷. On regions, Air Cargo News reported strong performance from Southeast Asia and China⁷, while The Loadstar said the company's presentation highlighted export strength from Southeast Asia excluding China¹. Sea Logistics also returned to volume growth, up 4.5% to 1.16m TEU, with divisional EBIT up 55% to CHF172m¹. The group raised its full-year recurring EBIT guidance to CHF1.5bn to CHF1.6bn from CHF1.35bn to CHF1.55bn, raising the midpoint by CHF100m¹.

DSV's revenue rose 12% to DKK80.6bn³, and EBIT before special items rose 19.5% to DKK6.6bn². It narrowed full-year guidance to DKK24bn to DKK25bn from DKK23.5bn to DKK25.5bn⁴. Air revenue rose 16.6% to DKK24.6bn and air gross profit 4.3% to DKK5bn, with average yields up 8% in constant currencies³. Volumes fell 3% in both air and sea².

DSV blamed yield management, cargo shifting from air to sea, weak activity in Europe, reduced e-commerce volumes on the Asia-Pacific to Europe lane, and weak Middle East lanes. Technology business in Asia-Pacific and North America partly offset the decline³. Chief executive Jens Lund told analysts: "I would say of the 3% decline, about two percentage points were sanitising and the remaining 1% a business decline, certainly in air freight"².

The split is share, not demand

The overall air market is growing, just not as fast as K+N. IATA reported global cargo demand up 4.4% year on year in August, while capacity fell 0.1%⁶. K+N said its volume growth "significantly" exceeded overall market growth⁷. DSV's chief executive put two of its three percentage points of decline down to pruning accounts rather than losing business².

The wider sector read is of a firm, not booming, peak. DHL Group raised its full-year EBIT outlook to EUR7bn from EUR6.5bn. It cited signs of a strong seasonal peak in the fourth quarter and said its express division had about EUR100m of support from airfreight capacity constraints⁸. That fits a market where pricing power sits with carriers and with forwarders that hold space, not with every forwarder equally.

Space is tight and priced accordingly

TAC Index's global Baltic Air Freight Index rose 4.7% in the week to 19 October. It is 26.4% above a year earlier, higher than the best points of the last two peak seasons⁵. Jet fuel is up 113.7% year on year, which TAC said will "put a hard floor under rates at which airlines will carry cargo"⁵.

Capacity is also being reshuffled. Airlines are adjusting winter freighter schedules and cutting belly space on some routes, and forwarders are renegotiating allocations. One forwarder told The Loadstar that airlines sometimes say "you have three pallets on that flight, now you can only have two", leaving the forwarder to find space elsewhere⁶.

Surcharges are moving up with fuel. MSC Air Cargo raised its surcharge to $2.30 or EUR2.30 per chargeable kg from 16 October, from $1.70 or EUR1.70⁶. Air Canada Cargo will raise its UK-origin surcharge for shipments to Canada and the US North-east and Midwest from 15p to 19p per kg from 26 October⁶.

For Indian shippers, belly capacity to Europe is shrinking at the same time. Air India is suspending Delhi to Copenhagen and Delhi to Vienna flights in its winter schedule. It is also cutting frequencies to Birmingham, London Gatwick and San Francisco, citing high aviation turbine fuel prices and the closure of Pakistan airspace⁹. Air France and Lufthansa are shifting Mumbai freighter operations to Navi Mumbai, which is a change of gateway rather than extra capacity⁶.

Ocean is a different picture. Drewry's Intra-Asia Container Index fell 3% to $1,453 per 40ft on 15 October, and Shanghai to Nhava Sheva dropped 11% to $3,370 per 40ft as port queues cleared¹⁰. The index is still 198% higher than a year earlier¹⁰.

What to settle before the 2027 contracts

Ask forwarders for space commitments by lane and month, not only a rate per kilo. Get the rules for rolled bookings and priority allocation in writing, because a cheap rate with no space is not a rate.

Split air allocations between two forwarders, and use direct carrier block space agreements for your largest lanes. Year-round block space makes Asian procurement less exposed to winter timetable changes than Europe to US routes, according to a forwarder quoted by The Loadstar⁶.

Index the fuel element. A base rate plus a fuel formula tied to a jet fuel benchmark, such as the IATA Jet Fuel Price Monitor, keeps a jump of 113.7% in jet fuel from reopening the whole contract⁵.

On ocean, keep 2027 contracts shorter or add review clauses. Maersk expects all its services to return to the Suez Canal by March 2027. The Suez Canal Authority described that as an expectation rather than a confirmed schedule¹¹. Ocean rates are still elevated, with DSV's growth helped by higher freight rates², and Drewry's intra-Asia index remains 198% above last year¹⁰.

Finally, price the currency. The rupee traded at 94.82 per dollar on 22 October, against 88.42 a year earlier¹². Most international freight is billed in dollars, so a weaker rupee raises the rupee cost of shipments priced in dollars even when the dollar freight rate is flat.