In a Thursday interview in London, CEO Stefan Paul pointed to two forces lifting the business: Chinese companies expanding into overseas markets and a buildout of data centers by hyperscalers. "These two blocks are driving demand," he said, adding that the mix is helping keep today's elevated cargo rates from fading in the near term.
Paul said demand for data center logistics is being driven largely by US tech companies and looks "secured for the next three years," with "double-digit growth" still anticipated until 2029. Kuehne+Nagel also announced a contract this week to handle data center logistics for Amazon.com Inc., a headline that helped push the stock to its highest level in two years.
According to Paul, Chinese producers - most notably carmakers - are targeting sales in regions outside the US. At the same time, he noted, "Trade lanes are growing from China into other markets like the US because this is where they find a home for their products." Net result: more China outbound flows into multiple destinations, including the US.
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With solid demand and lingering supply constraints, Paul expects freight prices will likely hold up through the rest of the year. "I do not foresee in the next couple of months to come, and as well not into 2027, that we'll see a significant softening," he said. His guidance to shippers: "it's more important to stay resilient and ensure that you have proper, resilient, and up-to-date supply chain planning rather than bet on lower prices."
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