According to the company’s earnings results, DHL Express US destination volume declined in the third quarter due to higher tariffs and the end of the country’s minimum exemption. Supply Chain Dive reported on these developments.
Also Read: DHL Increases Customs Capacity Amid Shifting Global Trade
The carrier’s flagship service, Time Definite International, saw its US bill weight drop by 32% in the year-ago quarter. The United States on August 29 removed low-cost tariffs that allowed imports under $800 to enter the country duty-free, exposing low-cost shipments to new tariffs imposed by President Donald Trump’s administration.
Despite volume pressures, DHL Express saw earnings before interest and taxes rise 1 percent in the third quarter. The company attributed the results in part to price adjustments and capacity management.
Supply chain settings and executive interpretation
The end of de minimis exemptions has created customs problems, postal restrictions and price pressures for companies as they try to adjust their supply chains to the new US business environment. Business-to-consumer shippers are particularly at risk because they typically ship more shipments that historically qualify for the exemption than business-to-business shippers.
“Especially the very low-value B2C cases have been impacted, partly also because customers are then switching to different forms of B2C shipping to the U.S., but we’ve seen more flexibility on the B2B side,” DHL Group CFO Melanie Kreiss said Thursday on a third-quarter earnings call.
Even if the Supreme Court undermines the president’s ability to impose tariffs under the International Emergency Economic Powers Act, Tobias Meir, CEO of DHL Group, does not envision an increase in business-to-consumer volumes. “There are other legal grounds that the president could use to impose tariffs,” Meyer said during the call.
Faced with US disruptions, DHL Express said in its results that it had “an opportunity to grow on business lines with underutilized capacity and improve network imbalances”. The company has also prioritized cost savings and volume changes in its air network and improving productivity in its ground and hub operations. “I think we’ve been able to deal with that [de minimis end] It is very effective by adjusting and changing the capacity.
Source: IndexBox Market Intelligence Platform
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