European logistics companies are set to report stronger first-quarter profits, benefiting from supply chain disruption linked to the U.S.-Israeli war with Iran, though analysts warn the conflict could weaken demand later this year.
Heightened complexity in global trade routes has historically supported profitability for major logistics groups such as DHL, DSV and Kuehne+Nagel.
However, analysts caution that the longer-term effects of rising energy costs and broader economic uncertainty may dampen volumes.
In a note to clients, analysts at Jefferies said Kuehne+Nagel’s management does not expect further yield pressure in its sea or air freight business in the first quarter, reinforcing expectations that earnings have stabilised and are set to improve.
They added that periods of geopolitical instability have historically driven a “sea-to-air spillover,” where cargo shifts from shipping to air freight - an area where DHL is structurally well positioned.
Air freight volumes are forecast to grow at a high single-digit rate in the first quarter, outpacing sea freight, which is expected to rise only modestly year-on-year, according to analysts at AllianceBernstein.
Sea freight demand has been weighed down by tough comparisons after shippers front-loaded cargo ahead of anticipated U.S. tariffs in April 2025.
Investor attention is also turning to DSV’s capital markets day on 12 May, where analysts expect updated medium-term financial targets, with potential for upside surprises.
Following renewed escalation in the Middle East, vessels have increasingly avoided the Strait of Hormuz, a critical artery for global energy and trade flows.
The disruption has intensified pressure on regional transport networks and driven up air cargo costs as demand rises alongside higher jet fuel prices and tighter capacity. The fallout extends beyond the Gulf, with heightened tensions also reinforcing risks in the Red Sea and delaying expectations for a full resumption of traffic through the Suez Canal route.
Global shipping giants including Maersk and Hapag-Lloyd have rerouted vessels around the Cape of Good Hope since the outbreak of the conflict, keeping freight rates elevated and boosting margins.
Even in the event of a peace agreement, analysts do not expect freight markets to normalise quickly.
While rates may ease if traffic resumes through Hormuz, any decline is likely to be gradual as supply chains have adapted, congestion has eased, and shippers continue to explore alternative routes. Analysts suggest pre-conflict trade patterns may not fully return.
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