DSV: Red Sea crisis having a limited impact on airfreight

Air transport (Photo: Eturbonews)

Speaking after the announcement of its full-year results, the forwarder's new chief executive Jens Lund explained the steps customers are taking to minimize the extra 14 days container shipping lines have to take to delivery to Europe due to attacks on ships in the Red Sea.

Essentially, they are shipping via the Cape of Good Hope and adjusting inventory levels to accommodate extended sailing times, Lund explained.

“Customers might be able to fix this issue just by buffering up, so that they will push more through, and have more in storage because they don’t get as frequent shipments,” he said.

“Other customers might have the demand to have a shorter lead time and here, of course, there is service where you could actually ship the cargo to Dammam and then cross Saudi Arabia and then put it on a vessel again.

“And then lastly, of course, there is always the opportunity, if you’re really in a hurry, to move to airfreight.”

He added: “I would say so far that we’ve seen limited impact on airfreight, we have seen some interest in relation to the volumes going across Saudi Arabi and then we see that most of the volume, goes via the Cape. And that’s also, from a financial point of view, the most efficient way.”

Lund says that today customers are more accustomed to disruption and are therefore more open to constructive dialogue about how best to manage the flow of goods.

Analysts also asked DSV about its lower market share performance in the air transport sector last year compared to its competitors.

Last week, the company reported air cargo volumes fell 16.3% on the year to 1.3 million tonnes, which DSV admitted was below market performance.

Lund said that the performance was largely due to DSV's lack of presence in the perishables market, one of the most improved verticals.

E-commerce could also have an impact, he said.

“There could be another factor as well on the airfreight where we don’t have a significant exposure and that is e-commerce exports out of Asia Pacific,” said Lund.

“We don’t have very good intelligence on the market when it comes to this. I think statistics are slowly coming out and we will then have a better picture.”

Read more:

• Red Sea crisis affects old ship recycling market
• Over 200,000 Containers Bound for Piraeus Port Delayed Due to Red Sea Crisis
• Red Sea Crisis: Second Largest Capacity Drop Since the Ever Given Grounding

Source: Phaata.com (According to AirCargoNews) 

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