Kuehne+Nagel takes logistics lead for Amazon data center expansion

Kuehne+Nagel, a leading global logistics company, has secured a long-term agreement to bolster its partnership with Amazon. The Switzerland-based company will handle logistics services for Amazon's expanding data centers and infrastructure needs, with a focus on Amazon Web Services (AWS). Kuehne+Nagel (K+N) has been collaborating with Amazon for over two years, transporting large volumes of servers and cargo via air to aid in data center construction and operations.

The new contract extends K+N's management of Amazon's logistics and supply chain services to include ocean, road, and contract logistics, covering equipment transportation throughout the infrastructure lifecycle, from maintenance to upgrades and expansions globally. K+N executives note that their contract logistics contracts typically span seven to ten years, with Amazon granted the option to purchase K+N's shares based on achieving specific commercial milestones.

This deal lasts for seven years and can be settled in cash or shares. The logistics sector has recently targeted the AI industry, which is heavily investing in data centers, as a significant growth opportunity. Kuehne+Nagel has witnessed strong demand from hyperscalers, particularly through the trans-Pacific route from China to the United States, according to the company's July 23 earnings call.

The logistics giant has increasingly involved itself in data center construction by managing last-mile delivery via its trucking unit, overseeing sea freight across the Pacific Ocean, and operating 3.3 million square feet of warehouse space for hyperscalers. Kuehne+Nagel CEO Stefan Paul expressed confidence in the company's contract logistics organization and capabilities, stating that he anticipates more contracts in the U.S. and other markets for tech hyperscalers.