DHL Express considers aviation fuel supplies secure for summer despite Iran war
Assessment of Aviation Fuel Security and Market Conditions
By Matthias Inverardi
DUESSELDORF, June 2 (Reuters) - DHL Express Europe considers its aviation fuel supplies secure for the summer despite uncertainty created by the Iran war, helped by easing market pressures and diversified sourcing, Chief Executive Mike Parra told Reuters.
Current Jet Fuel Market Trends
Jet fuel markets have loosened in recent weeks as demand has softened and imports into Europe have increased from the United States, Nigeria and South Korea, prompting Parra to conclude that no disruptions are expected at any of the company's major hubs and gateways.
DHL Express Operations Overview
DHL Express, the largest division of German logistics and postal services group DHL, employs roughly 120,000 people worldwide and operates a fleet of about 295 aircraft.
"All in all, there have not been any (fuel) shortages yet," the head of the premium delivery service's European branch said in an interview.
Impact of Geopolitical Events on Fuel Supply
Several tankers have managed to leave the Gulf in the past month, but oil and LNG flows are still severely constrained by the U.S.-Israeli war on Iran that began on February 28.
Contingency Planning and Network Flexibility
DYNAMIC NETWORKS
Parra added that the company's global network and contingency planning would allow it to handle potential localised shortages.
Alternative Fueling and Transportation Strategies
Aircraft can be fuelled at alternative locations and flight routes adjusted if necessary, while the company can also shift cargo to road transportation or reroute via different hubs.
"If things started to get really ugly and beyond normal, we have a very dynamic aviation network and network planning," Parra said.
Client Impact and Surcharge Management
Client behaviour has not shifted since the company decided to change to weekly fuel surcharge updates instead of monthly to better reflect energy price fluctuations, he said.
Most recently, the surcharge stood at 48.75% for international express shipments. Competitors FedEx and UPS also pass on additional costs through a surcharge.
Financial Performance and Surcharge Policy
Second-quarter results will be roughly in line with the first, Parra said. DHL Express Europe reported revenue of €2.87 billion ($3.34 billion) in that quarter.
The fuel surcharge is only being used to cover costs, he added. "It's not meant to become a profit centre."
($1 = 0.8590 euros)
(Reporting by Matthias InverardiWriting by Miranda MurrayEditing by Kirsti Knolle and David Goodman)
