Iran conflict lifts European logistics profits amid ongoing shipping chaos

European logistics companies are expected to report higher first-quarter profits, supported by supply chain disruptions linked to the US-Israeli war with Iran.

However, analysts caution that the same geopolitical turmoil could weigh on their outlook later in the year.

Heightened complexity in global supply chains has typically supported profitability for major players such as DHL, DSV, and Kuehne+Nagel.

These conditions have helped firms maintain pricing power and margins in the near term.

However, analysts have warned that the longer-term effects of rising energy costs and broader economic uncertainty could dampen demand in the coming months.

Earnings stabilisation and airfreight advantage

In a note to clients cited in a Reuters report, Jefferies analysts said that Kuehne+Nagel’s management does not expect further yield pressure in its sea or air freight business in the first quarter.

This has reinforced their view that earnings have stabilised and are likely to improve.

Jefferies also noted that periods of geopolitical instability have historically driven a shift from sea to air freight.

This trend, often referred to as “sea-to-air spillover,” structurally benefits companies like DHL.

Meanwhile, Bernstein analysts expect airfreight volumes to grow at a high single-digit rate in the first quarter, while seafreight volumes are projected to increase only at a low single-digit pace year-on-year.

They added that seafreight volumes have been impacted by tough comparisons after shippers accelerated cargo shipments ahead of US import tariffs in April 2025.

Focus turns to DSV capital markets day

Investor attention is also shifting towards DSV’s upcoming capital markets day scheduled for May 12.

Analysts are expecting updated medium-term financial targets during the event.

“The potential for upside surprises on the day is meaningful,” Bernstein said, as repoted by Reuters.

Middle East tensions disrupt global trade routes

Following a recent escalation in the Middle East conflict, ships have largely avoided the Strait of Hormuz, deepening uncertainty along a critical global trade route.

This disruption has placed additional strain on regional transport networks.

It has also pushed air cargo costs sharply higher, driven by strong demand, elevated jet fuel prices, and limited capacity.

The impact is extending beyond the Gulf region.

Rising tensions have also increased risks in the Red Sea, delaying expectations for a near-term resumption of transits through the Suez Canal route.

Freight rates remain elevated amid rerouting

Rico Luman, senior economist at ING Research, said “full resumption is now pushed back multiple months and perhaps even until the end of the year,” as cited in a Reuters report.

He added that this scenario should support logistics companies in the short term.

Global shipping companies, including Maersk and Hapag-Lloyd, have rerouted vessels around the Cape of Good Hope since the conflict began.

Slow return to normalisation expected

Even if the conflict is resolved, analysts do not expect freight markets to normalise quickly.

Luman said freight rates may decline after a peace deal allows traffic to resume through the Strait of Hormuz, but any fall is likely to be gradual.

Supply chains have already adjusted, and congestion has eased in some areas.