© Romolo Tavani |
As global freight markets begin to show signs of stabilisation after months of disruption, the industry’s largest forwarders have shown that recovering markets are not automatically translating into easier profits.
The warning, highlighted this week by profitability software provider OntegosCloud, comes as freight rates remain elevated, capacity remains constrained and geopolitical risks continue to distort supply chains. Yet first-quarter results from the world’s largest freight forwarders suggest profitability is increasingly being driven by pricing discipline, productivity gains and cost control rather than favourable market conditions.
DSV’s first-quarter results offered perhaps the clearest evidence. While the group reported strong revenue growth following its acquisition of Schenker, its Air & Sea division saw EBIT decline 4.9% year on year. The company attributed the performance to lower average gross profit yields in both air and ocean freight, citing market dynamics and integration effects. Air freight gross profit rose 44%, but average yields fell 7%, while sea freight yields declined 18%. Conversion ratios and operating margins both weakened compared with the previous year.
At CH Robinson, management highlighted extensive repricing activity and disciplined revenue management as the company sought to offset rising transportation costs. The company maintained margins despite higher truckload costs, with executives stressing targeted pricing actions and operational discipline rather than favourable market conditions as drivers of performance.
Kuehne+Nagel struck a similar tone. The Swiss forwarder exceeded first-quarter expectations and raised the lower end of its full-year earnings guidance, but management repeatedly pointed to cost reductions rather than market strength as the primary reason. The company’s cost-saving programme delivered faster-than-expected benefits, reducing unit costs and helping offset a 17% decline in recurring EBIT from the previous year. CEO Stefan Paul said “disciplined cost management” had driven the company’s strong start to 2026.
The pattern is consistent across the sector. Expeditors also exceeded expectations in the quarter despite relatively modest revenue growth, reflecting the importance of operational execution rather than simply benefiting from elevated freight rates.
Oliver Gritz, founder and chief executive of OntegosCloud, explained that this reflects a broader challenge facing the industry.
“There’s a common assumption that when disruption declines, profitability improves,” he said. “In reality, some of the greatest pressure on margins can emerge during the transition from volatility to stability.”
The risk, he argues, is that customer expectations begin normalising faster than forwarders’ underlying cost structures. Procurement teams often move quickly to seek lower transport costs once disruption eases, while insurance costs, network inefficiencies, contractual commitments and working-capital pressures can remain embedded for months.
There are already signs that large shippers remain intensely focused on cost control. US grocery giant Kroger warned yesterday that operating costs were rising faster than sales growth, while citing higher freight expenses linked to fuel costs. The retailer’s comments underline the continuing pressure on supply-chain budgets and suggest procurement teams may remain aggressive in seeking logistics savings.
That dynamic could become increasingly important in the second half.
Xeneta data shows that air freight contracts are already becoming shorter as uncertainty persists. It said more than half of air freight agreements between forwarders and airlines are now valid for less than 30 days, levels not seen since the pandemic. At the same time, air cargo load factors on key Asia-Europe and Asia-North America corridors remain close to maximum utilisation.
The result is a market where operational complexity remains high, but where profitability is becoming harder won.
The first-quarter earnings season suggests the industry’s largest players are, so far, managing that challenge successfully. But their results also indicate that profitability is being protected through repricing, cost reduction programmes and productivity improvements rather than through any broad-based improvement in underlying market conditions.
The biggest competitive advantage in the second half of 2026 may not be exposure to recovering markets, but the ability to preserve yields, protect margins and convert operational recovery into financial performance.