Reduced US de minimis threshold may potentially diminish DHL's profits by 3%
DHL Weathers Tariff Storm, Maintains Profit Guidance
The recent U.S. policy change eliminating duty-free access for small shipments from China and Hong Kong has had a significant impact on global courier services. DHL, one of the world's leading logistics companies, has seen a sharp decline (around 20%) in express overnight B2C shipments from these regions [4].
This tariff change is expected to cut DHL’s annual operating profit by about $231 million (3% of profit), reflecting softer volumes and higher costs in this segment [4]. Despite this anticipated negative impact, DHL has maintained its overall 2025 operating profit guidance of at least 6 billion euros (around $6.9 billion) [1][2][3].
The company has been able to offset other challenges such as slower trade volumes and currency headwinds through strict cost controls, capacity adjustments, and yield improvements. This resulted in a 5.7% increase in operating profit in Q2 2025 [1][2][3][4].
It is worth noting that only 8% of DHL Express overnight shipments move from China and Hong Kong to the U.S. [4], indicating that the company has less exposure to its most profitable trade lane compared to rival UPS.
Meanwhile, DHL eCommerce experienced slower volume growth due to economic conditions in certain markets. However, DHL Supply Chain's operating profit and margin increased due to digitization and automation deployment [5]. Post & Parcel Germany's earnings were stabilized despite slower growth in parcels, thanks to yield management and cost improvements [6].
Investments in growth markets are also on the rise for DHL. The company plans to invest over $570 million in the Gulf Arab states through 2030 [7]. DHL has also made strategic moves such as taking majority control over Saudi Arabian joint venture ASMO Advanced Logistics Services [8].
In an effort to optimize its e-commerce traffic, DHL began to squeeze out low-margin, lighter-weight traffic by raising prices and selling the space to freight forwarders with more dense cargo [9]. The company also announced the acquisition of Nashville, Tennessee-based specialty courier CrypPDP and expansion of its life sciences and health care campus near Frankfurt, Germany [10].
DHL is also making strides in sustainability. The company plans to have 4,900 electric vans from Ford Motor Co. in its Post & Parcel Germany delivery fleet by the end of the year [11]. Profit margins improved 0.7 of a point to 7.2% in the second quarter, and DHL maintained its guidance for operating profit of at least $6.9 billion and free cash flow of about $3.5 billion [12].
Despite a 3.9% decrease in DHL Supply Chain's top line revenue due to currency exchange headwinds [13], the company's second quarter revenue decreased 3.9% to $22.9 billion, but operating profit grew 5.7% to $1.6 billion [14].
In summary, while the tariff policy will negatively affect DHL’s profit margins on small-dollar shipments from China and Hong Kong, the company’s broader operational strategies are expected to mitigate the overall financial impact. DHL's resilience and strategic decisions position it well to navigate the challenges of the global logistics industry.
DHL's strategic investments, such as in growth markets and sustainability initiatives, could potentially offset the financial impact from tariffs on sports equipment and other consumer goods imported from China and Hong Kong. The company's expansions in life sciences and health care could also benefit from increased demand in sports-related products, given the growing popularity of fitness activities worldwide.
