Kuehne + Nagel Launches CHF 200 Million Cost-Cutting Programme Amid Earnings Slide.

Swiss freight forwarder Kuehne + Nagel (SIX: KNIN) reported a difficult third quarter for 2025, posting a significant decline in profitability and issuing a cautious outlook for the year ahead. The company said recurring EBIT fell to CHF 285 million in Q3 (down 37 % year-on-year), with net turnover slipping 7 % to around CHF 6 billion and gross profit down 4 % to CHF 2.1 billion.

Image: Kuehne + Nagel

The key driver of the downturn is persistent yield pressure in the Sea Logistics segment, where overcapacity and weak demand caused EBIT to fall 57 % year-on-year, with the segment’s conversion rate dropping to 24 %.

Air Logistics presented a slightly more upbeat volume story - volume rose 7 % - but yields still fell, dragging EBIT down 23 % and conversion to 23 %.

In response, Kuehne + Nagel announced a comprehensive cost-reduction programme targeting at least CHF 200 million of annualised savings. The plan focuses on staff reductions (CHF 110 million), facility optimisation (CHF 50 million), and other variable cost savings (CHF 40 million), with full run-rate expected by year-end 2026. One-off restructuring charges are expected in Q4 2025 and Q1 2026.

The company also confirmed job cuts ranging from 1,000 to 1,500 roles globally as part of the programme.

Cash flow offered some positive signal: free cash flow for Q3 reached CHF 226 million, representing a conversion rate of 105% - the highest since Q3 2022.

However, Kuehne + Nagel has lowered its full-year recurring EBIT guidance to greater than CHF 1.3 billion, down from the previous range of CHF 1.45-1.65 billion, citing currency headwinds, yield erosion, and uncertain global trade conditions.

What this means for logistics professionals:

• Tight yields in ocean forwarding signal continued pressure for carriers to maintain elevated rate levels or reduce capacity - Australian exporters and importers should expect limited margin relief from forwarders in ocean segments.

• The improved cash-flow conversion suggests forwarders like Kuehne + Nagel are safeguarding financial resilience - adding credibility to their service reliability, but also limiting the likelihood of rate softness until structural changes take effect.

• The cost-cutting programme and job cuts hint at a broader industry pivot: carriers and forwarders will prioritise efficiency, automation, and service focus (especially in air and contract logistics). Beneficiaries may include shippers in high-value segments who can afford premium service.

When the world’s biggest forwarder starts cutting a quarter-billion Swiss francs to defend margins, you know we’re not in a price war - we’re in a capacity discipline cycle.

Sources: Investing.com