(Sept 26): Kuehne+Nagel International AG sees at least three years of double-digit growth in the burgeoning business of logistics services catering to big technology companies and the data centres they’re building to handle the boom in artificial intelligence (AI).
The Swiss freight giant earlier this week announced a seven-year deal to handle such work for Amazon.com Inc, sending the company’s stock to a two-year high.
In an interview this week in London, chief executive officer Stefan Paul said Kuehne+Nagel customers include six of the so-called Magnificent Seven tech firms. Hyperscalers and others are looking for end-to-end supply chain services beyond basic transportation, including vendor management, customs clearance and onsite delivery.
“What we see is there is demand forecast secured for the next three years,” Paul said. “So 2027, 2028 and 2029, we already know somehow how much they foresee in terms of equipment and growth is concerned” and “there is still double-digit growth to be expected,” he said.
The AI frenzy conjures futuristic images of an invisible cloud, robots and quantum leaps in human productivity. But in the meantime it’s going require a lot of vehicles, warehousing and paperwork to muster the equipment used to build out the infrastructure.
That demand is among the reasons, analysts say, that China’s export juggernaut is stronger than ever and the US economy is weathering the headwinds of tariff barriers. It’s also partly why Kuehne+Nagel’s shares are up more than 30% this year.
Based in the sleepy village of Schindellegi, about 32km from Zurich, Kuehne+Nagel has an existing relationship with Amazon amounting to a couple hundred million dollars, but that revenue could grow into the billions.
“They give us more business, and we ensure the best quality possible,” Paul said.
The financial arrangement in the company’s new Amazon partnership revolves around an incentive model based on volume thresholds — reinforced with call options on Kuehne+Nagel shares. The economic value of the options is fixed through a hedging instrument which will cost Kuehne+Nagel “few million” dollars per quarter, according to Christopher Combé, head of investor relations.
“Our exposure is limited to the hedging expense,” Combé said. “But as the volume comes in and hits certain milestones, portions of that instrument vest, and Amazon has a choice to take shares or cash.”
Combé added that the maximum value for Amazon will be less than 3% of Kuehne+Nagel’s pre-deal market capitalization.
Paul’s strategy is under closer scrutiny since the death last month of the company’s third-generation majority owner, Klaus-Michael Kuehne, who built the transport provider into one of the world’s biggest ocean- and air-freight forwarders and became Germany’s wealthiest person. His holdings shift to the Kuehne Foundation.
“Basically, the foundation will take over the role of Mr. Kuehne as the majority shareholder,” Paul said in the interview, hours after the company announced a partnership with Contemporary Amperex Technology Co Ltd, China’s dominant maker of batteries for electric vehicles. “For Kuehne+Nagel, there is no change to be expected.”
For forwarders which facilitate the shipping process for cargo owners, disruption and uncertainty have been both a headache and boon.
Global merchandise trade has stayed resilient through US President Donald Trump’s tariff regime over the past 18 months, along with wars in Ukraine and Iran, largely because of demand for equipment needed to build and maintain data centers.
The monthly CPB World Trade Monitor released on Friday showed an index of merchandise volumes rose to a record in July, with Chinese exports among the biggest drivers.
According to Allianz Trade, export volumes of AI-enabling goods reached US$3.8 trillion (RM15.5 trillion) in 2025, doubling over the past decade and accounting for about 15% of global commerce. That share has increased to 20% this year, based on figures cited by Shanella Rajanayagam, a senior trade economist with HSBC.
The race to boost computing capacity for AI is particularly intense between the US and China, though other markets in Asia and the Middle East also have ambitious expansion plans, the Federal Reserve noted in a report this year.
Rajanayagam estimated that 80% of Taiwan’s total exports in 2026, for instance, are tied to the AI value chain.
Kuehne+Nagel isn’t alone jumping into data centre logistics. Rivals including DHL Group are, too.
“The new growth diamond is data centre logistics,” John Pearson, the CEO of DHL Express, said at a conference this month. Before this year, “the number of people that knew what a hyperscaler was, was not very many. Now it’s on every email, it’s in every day. So we’re running fast on that.”
Lee Klaskow, a senior logistics analyst with Bloomberg Intelligence, said industrial demand has been a “bright spot” for freight markets thanks to AI data centre investment, helping mitigate inflation pressures and higher interest rates that are weighing on consumer purchases.
The AI boom “has helped fuel the strength in air freight and flatbed trucking rates” and “should remain a tailwind into 2027” for transport companies, Klaskow said.