Kühne + Nagel is opening a new chapter. The globally active logistics group is saying goodbye to its ambitious margin targets and is now prioritising targeted growth. Instead of profitability, the focus is now on expanding market share - particularly in high-margin sectors such as pharmaceuticals and semiconductors. At the same time, new tariffs from the USA under President Trump are causing unrest in global trade. This development harbours risks for Kühne + Nagel, but could also bring opportunities. With an increased focus on customs services and flexibility, the company is positioning itself in an increasingly complex environment.
A break with old margin targets
Kühne + Nagel is moving away from the conversion rate as a performance indicator. The conversion rate is a profitability indicator that represents the ratio of EBIT (earnings before interest and taxes) to gross profit. The logistics company from Schindellegi (Switzerland) is now focussing on growth: in future, the company wants to achieve sales growth that exceeds global GDP growth by a factor of 1.5 instead. This change of direction comes after a difficult financial year in 2024, during which the company benefited from increased demand for its services due to supply chain difficulties. These times now seem to be over for good. Although Kühne + Nagel was able to increase its turnover slightly in 2024, its profit declined.
In addition, market share gains, particularly in high-margin segments such as the pharmaceutical and semiconductor industries, are at the centre of the new strategy. Growth is to be primarily organic, supplemented by targeted, smaller acquisitions. The management also wants to strengthen investor confidence through quarterly updates.
Trump's customs policy as a factor of uncertainty
The tightened customs policy of the USA under President Trump is causing uncertainty worldwide, particularly in the logistics sector. New tariffs on US imports from China, the EU, Switzerland and a number of other countries are leading to cost increases, delivery delays and increased coordination efforts for exporters and importers. Kühne + Nagel is also affected by these circumstances. According to the company, the demand for customs consulting has risen sharply in recent months. With the acquisition of the Canadian customs service provider "Farrow" at the end of 2023, Kühne + Nagel was able to expand its expertise in the area of customs consulting at the US borders with Canada and Mexico even before Donald Trump's election.
Both the legal scope and the ability to plan operations are diminishing for trading companies. US customs authorities are increasingly implementing consistent measures, while political guidelines can change at short notice. This leads to new challenges at an operational level. For example, when deliveries are already en route and import conditions change during transport. In the industry, such cases are referred to as "floating goods". These are containers whose logistical status is unclear. Even small delays, whether due to missing documents or technical breakdowns, can lead to considerable additional customs payments. In this environment, Kühne + Nagel benefits above all from the increasing complexity: companies need more advice, planning and flexible logistics solutions. Nevertheless, there is still a risk that the global trade volume will fall sustainably as a result of protectionist measures.
What could be next for the company?
It remains to be seen whether Kühne + Nagel's new direction can be realised in an increasingly volatile global environment. Trade conflicts, geopolitical tensions and short-term political decisions continue to cause uncertainty. While the increasing complexity of international trade creates additional demand for specialised logistics solutions and services, particularly in the area of customs clearance, it also increases the risk that volumes will decline or supply chains will have to be abruptly restructured.
Kühne + Nagel is responding to these uncertainties with a flexible approach: instead of short-term margin targets, the company is focussing on sustainable growth and broader diversification within the customer portfolio. The focus is on the ability to adapt quickly to new conditions. The more conservative forecasting policy could create more room for positive surprises. Better communication and consistent implementation of the new strategy could help to initiate a comeback of the ailing share price.