Demand and congestion support near-term logistics rates, but fleet expansion is building medium-term downside pressure

Overview

The report reviews the latest supply and demand conditions in global trade, ocean freight, air freight, and US ground transportation. Its core view is that consumer and trade demand remain resilient, while port congestion, geopolitical conflict, and tightening transportation supply support near-term rates and earnings. However, concentrated deliveries of new vessels and route normalization create clear medium-term supply pressure in ocean freight, resulting in significantly divergent outlooks across logistics business models and companies.

Core views

Global demand has not slowed materially despite inflationary pressure and high oil prices. Global export volumes rose 5.4% YoY in May, with the US up 3%, emerging markets up 5%, Japan up 2%, and Europe essentially flat at 0.1%; US imports rose 8%. Ocean freight volumes rose 5% YoY in June, with Asia–Europe routes up 17%, intra-Asia routes up 7%, and trans-Pacific routes flat. Forward indicators also remained expansionary: the report listed the US PMI at 55.6, up 2.3 points MoM, while relevant PMI readings in China and Europe remained above 50. The report therefore believes end-consumer demand and Asian export demand provide the fundamental support for current freight volumes, rather than freight rates being entirely dependent on geopolitical events. The ocean freight market remains tight in the near term. Conflict-related rerouting, peak-season demand, surcharges, and landside bottlenecks have jointly lifted prices, with SCFI 152% above pre-conflict levels and WCI 129% higher, and both rising further from one month earlier. Delays at the Port of Shanghai reached 12 days at one point. Although typhoons may have exacerbated the situation, this also reflected insufficient terminal capacity. The closure of the Strait of Hormuz has limited direct impact on global container volumes because the route accounts for only approximately 2% of global traffic. As the market was tighter than expected, Maersk raised its 2026 guidance again on August 13, increasing its underlying EBITDA forecast from $8bn—$10bn at the end of June to $10.5bn—$12.5bn, while maintaining its forecast of approximately 4% global container trade growth in 2026. Whether port congestion can offset fleet expansion over the long term is central to the ocean freight outlook. The report expects industry supply to grow 3.9% in 2026, accelerate to 7.7% in 2027, and rise further to 12.3% in 2028. By the end of 2026, the active fleet will be approximately 48% larger than in 2019, with net growth of 15%—20% in 2027—2028, significantly exceeding structural demand growth. Because Red Sea disruption requires carriers to deploy more vessels to maintain network reliability, while industry balance sheets and cash reserves remain strong, scrapping has stayed very low. Even if freight rates decline significantly, the report expects carriers may continue competing for share until their cash reserves are depleted, meaning industry discipline may not emerge quickly. The gradual reopening of the Red Sea and Suez routes will further increase effective capacity. Maersk, Hapag-Lloyd, CMA CGM, and COSCO have resumed passage through the Bab el-Mandeb Strait to varying degrees. Transit volumes since mid-July have exceeded the same period last year but remain low overall. If the recovery trend continues, capacity released by shorter voyages could significantly reduce ocean freight prices and liner companies' profitability; only persistent terminal congestion or stronger capacity discipline could provide a buffer. This is the primary basis for the report's cautious medium-term outlook on container shipping and its Underperform rating on Maersk. Air freight has similarly benefited from geopolitical disruption, but underlying demand is also healthy. Air freight prices are currently approximately 30% above pre-conflict levels due to modal shifts from ocean freight and fuel, insurance, and war-related surcharges. Global air freight chargeable weight recovered from an approximately 10% YoY decline in March to low-single-digit growth in August, while industry revenue shifted from an approximately 10% decline in March to approximately 25%—30% growth in August. IATA data showed global air freight demand rose 9% in June, marking the 16th consecutive month of growth. Etihad, Emirates, and Qatar Airways collectively account for approximately 13% of global air freight capacity, and their operations are now close to normal, so yields may normalize over the coming weeks to months. However, demand spans multiple regions rather than being concentrated solely on Asia–Europe routes. Express companies also benefit from higher prices for alternative capacity, fuel surcharge pass-through, and Middle Eastern transshipment volumes shifting into their own networks, with DHL Express cited as a typical example in the report. The improvement in US ground transportation is primarily supply-driven. Ex-fuel spot truckload rates have risen 48% YoY month-to-date, above 34% in May and approximately 20%—25% during the prior three months. Stricter enforcement of existing regulations governing driver qualifications, operating geographies, hours of service, training, electronic logs, and English proficiency, together with high oil prices forcing out carriers under prolonged profitability pressure, is reducing trucking supply. A Supreme Court ruling regarding broker liability may also further reduce capacity over time. The demand side has shown only preliminary improvement, including several consecutive months of expansion in the ISM Manufacturing Index, improving shipper confidence in manufacturing, and US domestic intermodal volumes turning positive for the first time this year at approximately 1% YoY year-to-date in May. The report believes this cycle will remain primarily supply-driven because consumer-related demand such as housing remains weak. Housing starts fell 8.7% YoY in May to 1,177, far below economists' original expectation of 10.9% YoY growth. At the company level, DSV is the top European logistics pick, rated Outperform with a DKK 2,100 target price. The report believes the market has not fully priced in the synergies following the acquisition of DB Schenker. DSV has a strong record of delivering synergies across five transactions over the past 20 years, and post-integration EPS is expected to exceed DKK 100 in 2028. Once leverage declines to approximately 2x, the company may resume share repurchases, with steady-state annual repurchase capacity of approximately DKK 24bn, compared with a current market capitalization of DKK 336,262 million. DHL is rated Market-Perform with a €47 target price. Its earnings are driven by both e-commerce and global trade: approximately 80% of EBIT is related to e-commerce, 70% to global trade, and 60% to both; Express contributes approximately half of earnings. The business is asset-intensive and has operating leverage, but approximately 25% of capacity is secured through short-term leases, providing some flexibility. If B2B volumes recover alongside the automotive, capital goods, and technology sectors, utilization and margins could improve. The company is also separating its domestic operations from its holding structure and streamlining cross-border legal entities, creating the conditions for future business separations. The report believes a breakup could narrow the SOTP discount. DHL has maintained or increased its dividend every year since selling Postbank in 2009, with a payout ratio of 40%—60% of net income and a current dividend yield of 3.4%. Kuehne+Nagel is rated Market-Perform with a CHF 200 target price. Its strategy is more focused on organic growth and high dividends. Recent volume performance has been reasonable, while cost reductions support earnings. The company also views its proprietary cloud-native transportation management system, workflow controls, and clean data as advantages in applying AI to freight forwarding. Similar to DSV, its asset-light model and flexible cost base can provide downside protection. By contrast, Maersk is rated Underperform with a DKK 14,100 target price. The report believes container shipping is a commoditized, price-taking industry, and that the large orderbook, low scrapping, and reopening of the Suez route will continue to pressure freight rates. Moreover, its integrated strategy has failed to deliver the promised revenue synergies over the past seven years.

Analysis framework

The report first assesses demand using global exports, imports, PMIs, and freight volumes on major trade lanes, then compares SCFI, WCI, air freight prices, and US trucking rates with pre-conflict levels or the same period last year. It subsequently analyzes supply changes by incorporating port congestion, route diversions, vessel orders, scrapping, regulatory enforcement, and fuel costs. Finally, it connects industry volumes and pricing with each company's asset intensity, operating leverage, M&A synergies, capital returns, and relative valuation to derive company ratings and target prices.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Supply-demand balance among transportation demand, nominal capacity, and effective capacity

  The report uses freight volumes and PMIs to measure demand and treats new vessel deliveries, scrapping, rerouting, terminal congestion, and trucking exits as supply variables to assess whether freight rates can be sustained.

• Industry/Sector Analysis FrameworkVolume-price decomposition

  Decomposition of freight volumes, freight rates, and revenue growth

  The report separately tracks ocean freight volumes, air freight chargeable weight, and various freight rates to explain how much revenue growth comes from volume recovery and how much comes from higher rates and surcharges.

• Valuation MethodSOTP Valuation

  DHL sum-of-the-parts valuation and conglomerate discount

  The report views DHL as five logistics businesses under one corporate structure and believes a potential breakup could help narrow its SOTP discount.

• Valuation MethodPE/PEG valuation

  P/E comparison based on Bernstein earnings forecasts

  The European and North American logistics company comparison tables use current-year and future-year earnings forecasts and implied P/E ratios to compare company valuations.

• Valuation MethodEV/EBITDA valuation

  Peer comparison using enterprise value multiples

  The North American transportation comparable-company table uses multiples such as EV/EBITDA to compare the valuation levels of railroads, parcel companies, and freight brokers.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• DSV

  Top European logistics pick, Outperform, with a DKK 2,100.00 target price.

  Strengths

  Strong record of delivering synergies across five previous acquisitions; asset-light model and flexible cost base provide downside protection; DB Schenker integration and future share repurchases provide potential upside.

  Weaknesses

  Currently needs to complete its largest-ever integration, DB Schenker, and reduce leverage to approximately 2x.

  Comparison

  Like Kuehne+Nagel, it is a large publicly listed pure-play freight forwarder, but DSV places greater emphasis on M&A integration.

  Risks

  If integration synergies do not materialize as expected, the report's projected 2028 earnings and capital return trajectory could be affected.

• DHL

  Market-Perform, with a €47.00 target price; benefits from e-commerce, global trade, and air freight disruption.

  Strengths

  Express operates in a healthy three-player market, with pricing power and structural growth above GDP; approximately 25% of capacity is secured through short-term leases, providing some cost flexibility; stable dividend record.

  Weaknesses

  The asset-intensive Express business has significant operating leverage to freight volumes, while B2B recovery still depends on improvement in weak sectors such as automotive, capital goods, and technology.

  Comparison

  Compared with asset-light freight forwarders, DHL has a heavier asset burden and greater sensitivity to freight volumes, but a potential breakup could narrow the SOTP discount.

  Risks

  A delayed recovery in B2B volumes or failure to advance group simplification and breakup preparations.

• Kuehne+Nagel

  Market-Perform, with a CHF 200.00 target price.

  Strengths

  Asset-light model and flexible cost base, cost reductions, organic growth strategy, and proprietary cloud-native transportation management system, workflows, and data foundation.

  Weaknesses

  The report did not identify a clear near-term valuation catalyst.

  Comparison

  Compared with DSV, it places greater emphasis on organic growth and high dividends rather than M&A-driven growth.

  Risks

  Weaker freight forwarding volumes and pricing would still affect earnings, although the flexible cost structure could provide a buffer.

• A.P. Moller-Maersk

  Underperform, with a DKK 14,100 target price.

  Strengths

  Currently benefits from strong freight rates, Asian export demand, and landside congestion, and has raised its 2026 underlying EBITDA guidance.

  Weaknesses

  Its core container shipping business is commoditized and lacks pricing power; the report believes its integrated strategy has failed to deliver the promised revenue synergies over the past seven years.

  Comparison

  Compared with asset-light freight forwarders, Maersk is more directly exposed to excess vessel capacity and declining ocean freight rates.

  Risks

  Concentrated new vessel deliveries, low scrapping, and the reopening of the Red Sea–Suez route could increase effective supply and reduce freight rates.

• NSC

  Outperform, with a $396.00 target price; among the North American railroad assets favored by the report.

  Strengths

  Tightening US ground transportation capacity and an improving domestic intermodal cycle provide industry support.

  Comparison

  Rated Outperform alongside UNP, above the Market-Perform ratings on CSX, CNI, and CP.

  Risks

  If manufacturing and freight demand weaken, the cyclical improvement may fall short of expectations.

• UNP

  Outperform, with a $346.00 target price; benefits from improving US ground transportation and intermodal conditions.

  Strengths

  Supply-side tightening and domestic intermodal volumes turning positive provide industry support.

  Comparison

  Rated Outperform alongside NSC.

  Risks

  Demand improvement remains at an early stage, while consumer-related sectors such as housing remain weak.

• JBHT

  Outperform, with a $329.00 target price; management believes the truckload and intermodal cycles have turned.

  Strengths

  The company has observed stronger demand for services, while the supply-driven freight recovery continues to accelerate.

  Weaknesses

  The brokerage business may face industry consolidation, changes in customer behavior, and pressure on procurement rates.

  Comparison

  JBHT has a more positive rating than CHRW's Market-Perform rating.

  Risks

  The cyclical improvement primarily depends on supply contraction, while evidence on the demand side remains limited.

• UPS

  Outperform, with a $131.00 target price.

  Strengths

  Express operators benefit from stronger pricing, fuel surcharge pass-through, and disruption-related volume inflows.

  Comparison

  Rated Outperform alongside FDX.

  Risks

  The recovery of regional air capacity could drive yield normalization.

• FDX

  Outperform, with a $397.00 target price.

  Strengths

  The express industry benefits from higher prices for alternative air capacity, surcharge pass-through, and healthy cross-regional demand.

  Comparison

  Rated Outperform alongside UPS.

  Risks

  Air freight prices may decline after Middle Eastern airlines restore capacity.

• CSX

  Market-Perform, with a $48.00 target price.

  Strengths

  Tightening US ground transportation supply and improving manufacturing indicators provide industry support.

  Comparison

  Rated below the Outperform ratings on NSC and UNP.

  Risks

  Demand improvement has not been comprehensively confirmed.

• CNI/CNR.CN

  Market-Perform, with a C$196.00/US$139.16 target price.

  Strengths

  Improving North American railroad and intermodal conditions provide industry support.

  Comparison

  Rated below the Outperform ratings on NSC and UNP.

  Risks

  The freight demand recovery is still supported primarily by early manufacturing signals.

• CP/CP.CN

  Market-Perform, with a C$144.00/US$102.24 target price.

  Strengths

  Tightening North American ground transportation supply and improving intermodal conditions provide support.

  Comparison

  Rated below the Outperform ratings on NSC and UNP.

  Risks

  If demand-side signals do not persist, the supply-driven improvement in freight rates may slow.

• CHRW

  Market-Perform, with a $151.00 target price.

  Strengths

  Rising US trucking spot rates and structural capacity exits support the transportation market.

  Weaknesses

  Changes in broker liability may drive industry consolidation while negatively affecting customer behavior and procurement rates.

  Comparison

  Rated below JBHT's Outperform rating.

  Risks

  The transmission speed and ultimate impact of the broker liability ruling remain uncertain.

Key data

• Global ocean freight volumes in June+5% YoYAsian export demand and end-consumer demand remained resilient
• Asia–Europe ocean freight volumes in June+17% YoYStrongest growth among major routes
• Intra-Asia ocean freight volumes in June+7% YoYIntraregional trade remained strong
• SCFI+152% versus pre-conflict levelsLatest level was higher than one month earlier
• WCI+129% versus pre-conflict levelsJointly supported by peak season, surcharges, and congestion
• Air freight pricesApproximately +30% versus pre-conflict levelsDriven by modal shifts from ocean freight and fuel, insurance, and other surcharges
• Global air freight demand in June+9% YoY16th consecutive month of growth
• Air freight industry revenue in AugustApproximately +25%—30% YoYHad declined approximately 10% YoY in March
• US ex-fuel spot truckload rates+48% YoY month-to-date+34% in May and approximately +20%—25% during the prior three months
• US domestic intermodal volumesApproximately +1% YoY year-to-date in MayTurned positive for the first time this year
• Industry capacity supply growth+3.9% in 2026, +7.7% in 2027, and +12.3% in 2028New vessel deliveries increased while scrapping remained low
• Active fleet sizeApproximately +48% at the end of 2026 versus 2019Net growth of 15%—20% expected in 2027—2028
• Maersk 2026 underlying EBITDA guidance$10.5bn—$12.5bnRaised from $8bn—$10bn at the end of June
• Maersk 2026 global container trade growth forecastApproximately 4%The company maintained its previous forecast
• Maersk second-quarter fuel prices+44% YoYIncreased operating costs
• DSV post-integration earnings per shareDKK 100+ in 2028Includes synergies following the acquisition of DB Schenker
• DSV steady-state annual repurchase capacityApproximately DKK 24bnExpected to resume once leverage declines to approximately 2x
• DHL dividend yield3.4%Payout ratio is 40%—60% of net income

Impact & implications

The report believes logistics companies' near-term earnings will continue to benefit from resilient freight volumes, elevated rates, congestion, and fuel surcharge pass-through, but the degree of benefit varies across business models. Asset-light freight forwarders and express operators with pricing power, network advantages, and cost flexibility are more defensive; US trucking and intermodal transportation are supported by structural capacity contraction; container liner companies, however, face medium-term earnings pressure from new vessel deliveries and route normalization. Accordingly, the report favors DSV and selected North American railroad, trucking, and express companies while remaining cautious on Maersk.

Risks

• Large numbers of new vessels are scheduled for continued delivery through 2028, while scrapping remains low, potentially causing ocean freight supply growth to significantly exceed structural demand.
• The gradual reopening of the Red Sea, Bab el-Mandeb Strait, and Suez routes could release effective capacity, reducing ocean freight prices and liner company earnings.
• If port congestion subsides, a key source of current freight rate support will weaken.
• Middle Eastern airline capacity is already close to normal, and air freight yields may decline over the coming weeks to months.
• Changes in oil prices and Middle East peace negotiations could alter the extent of ground transportation supply tightening.
• The US ground transportation recovery remains primarily supply-driven, while consumer-related demand such as housing remains weak.
• Maersk's integrated strategy has failed to deliver the expected revenue synergies over the long term.

What to watch

• Track whether port congestion can continue absorbing capacity as new vessels are delivered and fleets expand.
• Monitor the pace of reopening and changes in transit volumes on the Red Sea, Bab el-Mandeb Strait, and Suez routes.
• Watch new vessel deliveries, scrapping, and carrier capacity discipline in 2027—2028.
• Track whether global freight volumes, Asian export demand, and PMIs in the US, China, and Europe can remain expansionary.
• Monitor changes in air freight prices, chargeable weight, and industry revenue after Middle Eastern air capacity recovers.
• Watch US trucking regulatory enforcement, fuel costs, carrier exits, and domestic intermodal volumes to verify the sustainability of the cyclical inflection point.