[Stay on top of transportation news: Get TTNews in your inbox.]
Kuehne+Nagel enters into long-term collaboration with Amazon
Swiss company says the collaboration is designed to strengthen customer services for Amazon and includes Amazon Web Services
A K+N loading dock in Dagenham, U.K. (Chris Ratcliffe/Bloomberg)
Key Takeaways:
- Kuehne+Nagel entered a long-term strategic collaboration with Amazon that includes AWS support and sent its shares up as much as 5.2% on Sept. 21.
- The deal strengthens Kuehne+Nagel’s position in data center infrastructure logistics and includes a milestone-based call option tied to existing shares over up to seven years.
- Amazon and Kuehne+Nagel will expand services under the agreement as the Swiss freight company moves forward following majority owner Klaus-Michael Kuehne’s death last month.
Swiss freight transportation group Kuehne+Nagel International AG has entered a long-term strategic collaboration with Amazon.com Inc., less than a month after its majority owner died.
Kuehne+Nagel said the collaboration is designed to strengthen customer services for Amazon and includes Amazon Web Services. That will strengthen supply chain resilience and efficiency, the Swiss company said in a statement on Sept. 21. Kuehne+Nagel shares rose as much as 5.2%, the most since March.
READ MORE: Kuehne+Nagel could sell stake in Apex Logistics unit
The collaboration is supported by a call option on existing Kuehne+Nagel shares that settles in cash or, at Amazon’s election, in shares, with vesting based on commercial milestones and services over a period of up to seven years. A third-party financial institution will engage in hedging transactions in Kuehne+Nagel shares to support this arrangement, the Swiss firm said.
“We are setting the foundation for a new level of customer service commitment at a global scale for Amazon,” Kuehne+Nagel CEO Stefan Paul said in the statement.
The collaboration with Amazon comes after German shipping tycoon Klaus-Michael Kuehne, who expanded the Kuehne+Nagel into one of the world’s biggest sea and air freight forwarders, died last month. As a third-generation majority owner of the company, which was founded by his grandfather, Kuehne broadened its global reach through acquisitions, expanding into a global transport behemoth with a staff of 88,000.
Data center boom
The deal highlights Kuehne+Nagel’s “strong and growing” position in the profitable data center infrastructure logistics market, according to Vontobel analyst Michael Foeth. He has a buy-rating on the stock.
Kuehne + Nagel is seen as a bellwether for the global economy. The company boosted its recurring Ebit guidance for the year in July following strong results in its air and sea logistics businesses.
In the past decade, Amazon has built its own freight and delivery operation, reducing its reliance on partners that couldn’t keep pace with the Seattle-based company’s growth. In May, it announced Amazon Supply Chain Services, packaging its existing air and ocean freight, trucking and last-mile delivery services into a new offering.
Arpan Podduturi of Samsara examines how AI, telematics and onboard cameras are converging to protect drivers and reduce risk. Tune in above or by going to RoadSigns.ttnews.com.
Amazon ranks No. 1 on the Transport Topics Top 100 list of the largest logistics companies in North America and No. 1 on the TT Top 50 list of the largest global freight companies. It ranks No. 17 on the TT100 list of the largest private carriers in North America.
Kuehne + Nagel ranks No. 8 on the TT100 logistics and No. 12 on the global freight list.
