Deutsche Post DHL Faces Normalizing Parcel and Freight Volumes in Q3

Narrow-moat Deutsche Post DHL’s third-quarter organic revenue grew 11% organically year over year (versus 16% growth last quarter), once again ahead of our expected run rate due in part to fuel surcharge noise. Relative to the same period last year, revenue growth came from higher fuel surcharges and lingering core pricing gains (for global forwarding and express), partly offset by ongoing normalization in B2C parcel volumes and softening B2B activity (slowing economic trends) across all segments. We note that the global air and ocean forwarding backdrop is now seeing more pronounced normalization off historic highs, though that's not a surprise. Also, Express' B2C parcel-delivery comparisons are starting to ease as the firm lapped the peak of pandemic-driven residential deliveries seen in first-half 2021.