Gulf conflict: DHL CEO plays down exposure, highlights resilience of network

DHL has a strong presence in the currently war-torn Middle East and last year announced a $500 million investment program in the region.

However, CEO Tobias Meyer has put a positive spin on such exposure, highlighting the flexibility and resilience of the logistics giant’s network, which is providing scope to find solutions aimed at limiting the impact of the military conflict on its customers’ supply chains.

In a conference call with analysts yesterday, which followed the presentation of the company's annual results, he underlined that DHL had been operating in the Middle East for several decades.

“So, we have been part of the turmoil that, unfortunately, the region has gone through and is currently going through. We had some of that also last year, but obviously now on a broader scale. I'm proud of our colleagues on the ground. We have a very experienced team that knows how to deal with it, to keep our employees safe, but also to keep cargo moving, to keep supply chains running.”

He pointed to a fast-developing situation, which is subject to change day by day, hour by hour. “The closed airspaces are having a major impact in grounding air cargo capacity. We are acting to get aircraft out of those areas, out of those airports that are primarily impacted. We have a great ground network, a road network in the Middle East, and as part of our express operations. That's a great asset now because we can move cargo to those airports that are open, that are functioning, and redeploy capacity there. So that's very important on the air and express side.”

First Ocean Cargo Offloads

The ocean side is more challenging, Meyer observed. “We are seeing the first offloads of cargo from ocean carriers to free up vessels that currently cannot call at Gulf ports, and this is something that is clearly going to cause a certain level of disruption to supply chains.”

Some offloads are likely to take place in ports in Asia and the Indian subcontinent, leading to potentially significant delays in getting cargo to its scheduled destination.

“What happens on the ocean freight side is more of a concern, especially if there is no change in the situation, because some of the countries in the Gulf are highly dependent on 'essentials'. For example, the region is not self-sufficient when it comes to food.”

In Demand in 'Turmoil'

Meyer continued: “As tragic as this military conflict is and the crisis it triggers, given our set-up (in the region), what we do and the segments we are in and learning from past situations, we are strongly in demand when turmoil arrives, rather than being negatively exposed.

“The disruption is causing a spill into air freight from ocean and from land transport and surface transport into air and express. With our significant footprint in the region, we are often the go-to party. This was the case with the recent floods in Morocco, which led to massive volume increases. Now you're not going to see that in our numbers, because Morocco overall is a small market, but it's just to make the point: when supply chains are under threat, people need our services.”

The conflict did not in any way harm DHL's confidence about 2026 nor call into question the company's long-term investments in the region, which continues to be viewed as attractive, Meyer added

Thinking about the potential disruption coming from the Middle East again, how do you, what's your sense about the potential positives coming from better pricing versus... Do you think you are going to be more exposed to positive effects from this?

So, our presence in the Middle East varies by division. You know, relative to the GDP size of the region, it's slightly higher in expression. It's lower in the supply chain, to name the two extremes.

As tragic and regrettable as these conflicts are, given what we do and the segments we are in, and based on previous experience.

Meyer added that DHL still adheres to its investment plans in the Middle East.

"Those are long-term investments, and we believe that the region is still attractive," he ‌said.