DB Schenker business unit
Development in relevant markets
European land transport
European land transport suffered a significant decline in the first half of 2020 due to Covid-19. The lack of volumes from international trade, mainly from China, followed by the standstill in the automotive and supplier industry throughout Europe, had a negative impact in the first quarter of 2020. The lockdowns implemented in the largest European countries had a further negative impact from the second quarter. Positive developments in the consumer and hygiene/healthcare industries went some way toward mitigating the negative effects, but cannot compensate for them.
DB Schenker recorded a decline of 4.1% in the volume of shipments.
Volume in the global air freight market also dropped in the first half of 2020. As of May 2020, volume had fallen by 14%. Since approximately half of the freight is normally transported in the hold of passenger aircraft, but passenger transport having come to an almost complete standstill in the spring of 2020, cargo capacity fell even more sharply than demand at 17%. The result was considerably higher freight rates, which, combined with lower fuel costs, mitigated the impact on the results of global logistics companies.
At DB Schenker, tonnage fell by 14.4%.
In April 2020, the RWI container throughput index fell to its lowest level in three years, and as of May 2020 it was down 7% from the corresponding previous-year figure. The lockdowns in Europe and America led to significant losses on the corresponding trade routes with these regions, both between these regions and with other countries. Slight recovery has finally been observed for goods exported via Chinese ports.
The low fuel prices resulting from the excess supply of oil are mitigating the cost increase expected as a result of the entry into force of IMO 2020, which regulates sulfur emissions in maritime transport. Moreover, the large carriers are keeping freight rates stable through the disciplined retention of capacity (“blank sailing”). Both effects are reducing the negative impact of falling volumes on the results of suppliers.
DB Schenker’s ocean freight volume fell by 11.0%.
For the first time in many years, there are signs of a loss of the accustomed dynamism in contract logistics in 2020. Production shutdowns as a result of the lockdowns caused disruption to international supply chains, production bottlenecks on the one hand and overcrowded warehouses on the other. The automotive industry, along with all upstream and downstream sectors, has been particularly affected in this regard, as well as the industrial goods and textile industries. The food, healthcare, hygiene and high-tech industries, on the other hand, are performing well. E-commerce, which is already growing dynamically, is also benefiting.
At DB Schenker, revenues in contract logistics fell by 3.9%.