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DHL Warns of ‘Tipping Point’ Risk If Oil Shortage Persists
CEO Tobias Meyer Says Single Event Can Trigger 'Broader Uproar'
DHL Group’s CEO warned that the global economy risks hitting a “tipping point” if the shortfall in oil supply isn’t resolved, as the conflict in the Middle East squeezes transport routes and pushes up freight costs.
Consumers often fail to fully recognize the impact of crises until a single event — such as a major plant closure in a Western country — triggers “broader uproar,” DHL CEO Tobias Meyer said.
“This hasn’t happened yet,” Meyer said in a television interview. “But if the underlying economic issue — the lack of supply of energy, the 10 million, 12 million barrels of crude oil per day — if that is not resolved, it’ll come to that tipping point.”
Concerns about fuel supplies are growing amid tensions in the Middle East, with airlines calling on governments to take emergency steps to avoid flight cuts. DHL has seen a “tremendous” impact due to the war in Iran and the closure of the Strait of Hormuz is impacting the movement of containerized goods, Meyer said.
Asked about fuel supplies, Meyer said there’s “not much we can do,” adding that DHL is talking to its suppliers and that the “willingness to pay is important.”
Global trade routes between Asia and Europe are becoming “quite limited,” especially as Western airlines avoid Russian airspace and Gulf carriers operate below pre-war capacity.
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TT Top 100 Logistics Companies
The largest 3PLs in North America continued to face volatile business conditions last year, from compressed margins to tariff-driven supply chain upheaval. Read more
“You see tight markets out of India, out of Southeast Asia, especially to Europe,” Meyer said. “And we’ll continue to see elevated freight rates until the situation has further eased and resolved itself in the Middle East itself.”
In the long term, however, Meyer doesn’t believe the conflict will structurally change trade.
“Think about pharmaceuticals, medical devices — those will not be produced in every country, quite the opposite,” he said. “Those goods get more complicated, more concentrated and these are goods that need to be traded.”
DHL Supply Chain ranks No. 13 on the Transport Topics Top 100 list of the largest logistics companies in North America. DHL Group ranks No. 5 on the Transport Topics list of the 50 largest global freight companies.
