Industrial and mobility (2 of 5)

Logistics and shipping

About 9 minutes to read in full, or 1 minute for the short version belowFacts checked 30 September 2026

In one minute

Companies that move and store other companies' goods: by ship, plane, train and truck, through ports and warehouses, to the shop or the front door.

The big idea: Logistics sells the movement and storage of other people's goods, and most of its cost is time and distance: the days a ship sails, the hours a driver drives, the days goods sit in a yard. Asset-heavy players (shipping lines, ports, warehouses) live or die by how full their assets are and by freight rates they do not control; asset-light players (freight forwarders) earn a margin for organizing the journey. Know which kind you are looking at.

One unit, in numbers: One 40-foot container from Shanghai to Rotterdam: USD 3,500 comes in, and USD 900 (26%) is left after its own costs.What is left is the unit's contribution, before the costs of the whole company. See the worked example
Typical margin: About 7 percent operating margin for listed transport and trucking companies; ports and railways earn far more, while shipping lines swing from losses to record profits with freight ratesRoughly how much of every 100 of sales (or income) is left as profit after the running costs. More on margin
Capital intensity: HighA lot of money must be tied up before the business earns anything, so the return on that money matters as much as the margin. More on capital intensity
The number to watch: Load factor (utilization)The share of a ship, plane, truck or warehouse that is filled; fuller assets spread fixed costs over more goods.

Ask this first in a case

What moves, from where to where, how often and in what volume?

Words used above (1)

Freight forwarder:: A company that organizes shipments and paperwork, buying space from carriers.

The industry's other words are explained in Words to know (13).

On this page (17 sections)

How money is made

Shipping lines earn a freight rate per container on each trade lane; profit depends on the rate and on how full the ships are.
Freight forwarders earn the gap between what shippers pay them and what they pay carriers, plus fees for customs and paperwork.
Ports and terminals earn fees per container moved, plus storage charges, usually under long concessions from governments.
Warehouses and contract logistics firms earn fees per pallet stored or order picked, or cost plus a margin.
Parcel and last-mile firms earn a price per parcel; profit depends on how many successful drops each van makes a day.
Free zones earn rent on land, warehouses and offices, plus service fees, from companies drawn by duty-free storage and re-export.

Worked example: one unit

Unit economics means the money in and out for one unit of the business. Start from the revenue, take away the unit's own costs, and what is left is its contribution. More on unit economics

The unit: One 40-foot container from Shanghai to Rotterdam, the shipping line's view (rounded, illustrative costs). Illustrative, rounded figures.
Line	Amount	ShareShare of revenue
Spot freight rate per 40-foot container (Drewry: about USD 3,485 on 24 September 2026, rounded)	USD 3,500	100%
Minus Ship time: charter or capital cost of the vessel for the voyage	USD 330	9.4%
Minus Fuel	USD 495	14%
Minus Port and canal fees	USD 470	13%
Minus Terminal handling and the container itself	USD 600	17%
Minus Share of the weaker return leg and moving empty containers back	USD 450	13%
Minus Sales, offices, agents and IT	USD 255	7.3%
What is left (contribution)	USD 900	26%

Check: USD 3,500 minus USD 2,600 of costs leaves USD 900.

So what: At today's rate the box earns about USD 900, but the break-even is near USD 2,600, and spot rates can fall that far within months. The voyage costs are mostly fixed once the ship sails, so the levers are the freight rate and utilization: filling the ship (and the return leg) spreads the same ship, fuel and port costs over more containers.

Key measures(9)

Key measures (also called KPIs, key performance indicators) are the numbers people in this industry track. Ask for the first one or two early in a case.

Load factor (utilization)
The share of a ship, plane, truck or warehouse that is filled; fuller assets spread fixed costs over more goods. Glossary: Load factor (utilization)
Freight rate
The price to move one container (or one kilogram, or one load) on a route; spot rates change weekly, contract rates are fixed for months.
Typical: Drewry's World Container Index was about USD 4,468 per 40-foot container on 24 September 2026, with Shanghai to Rotterdam about USD 3,485[2]
Cost (or revenue) per tonne kilometre
What it costs to move one tonne of goods one kilometre; it shows why heavy goods go by ship or rail and urgent ones by truck or air.
Typical: In older US data (2007), trucks earned about 16.5 US cents per ton-mile against about 3 cents for rail, roughly five times more[3]
On-time delivery (schedule reliability)
The share of ships, trucks or orders that arrive on time; for container shipping it is the share of vessels arriving on schedule.
Typical: Global container schedule reliability reached 64.7 percent in May 2026, its highest of the year so far, so roughly one ship in three still arrived late[4]
On time in full (OTIF)
The share of orders delivered complete and on time, the measure most shippers judge warehouses and carriers on.
Dwell time
How long a container stays in a port yard or goods stay in a warehouse. By Little's law (items waiting = items arriving per day times days each one waits), shorter dwell frees space without new land. Glossary: Dwell time
Port throughput
Containers handled in a year, counted in TEU (twenty-foot equivalent units; a 40-foot box is 2 TEU).
Typical: Singapore handled a record 44.66 million TEU in 2025, up 8.6 percent[5]
Cost per drop and failed delivery rate
Last-mile cost for each successful delivery, and the share of attempts that fail (nobody home, wrong address).
Logistics cost as a share of GDP
What an economy spends on transport, storage and handling compared with its size; lower means goods move more cheaply.
Typical: About 7.8 to 8.9 percent for India in 2021-22, down from 8.7 to 9.9 percent in 2011-12[6]

First questions to ask

When a case lands in this industry, these questions get you to the numbers that matter.

What moves, from where to where, how often and in what volume?
What does the customer value most: the lowest cost, the fastest route or the most reliable one?
Is the client asset heavy (ships, ports, warehouses) or asset light (a forwarder)?
How full are the assets today, and where is the slowest step or bottleneck?
How much of the change is the market freight rate, and how much is the client's own cost?

Value chain: where the margin sits

The value chain is the steps a product or service passes through, from the first supplier to the customer. Each step below shows how much of the value it keeps. More on value chains

Step 1: Shipper: the company that owns the goods
Margin varies
Manufacturers, brands and retailers, for example a clothing brand shipping from Vietnam
The customer; it buys transport on cost, speed and reliability.
Step 2: Freight forwarding: booking, paperwork and organizing each step
Medium margin
DSV (with DB Schenker), Kuehne+Nagel, DHL Global Forwarding, Expeditors, CEVA
Asset light: earns a margin between what the shipper pays and what carriers charge, plus fees.
Step 3: First and last leg on land: trucking and rail to and from ports
Thin margin
Trucking firms, railways, inland terminals
US-listed trucking firms average an operating margin of about 7 percent; US freight railways about 37 percent, because track is a scarce asset.
Step 4: Ports and terminals
Fat margin
PSA International, DP World, AD Ports, APM Terminals, Adani Ports, Hutchison Ports
Long government concessions and few rivals: DP World earned about 26 percent of its 2025 revenue as EBITDA.
Step 5: Ocean shipping
Margin varies
Container lines such as MSC, Maersk, CMA CGM, COSCO, Hapag-Lloyd, ONE, Evergreen
Very cyclical: freight rates can halve or treble within months, so profits swing from losses to record years.
Step 6: Customs, warehousing and contract logistics (3PL)
Thin margin
Customs brokers, third-party logistics firms, free zone operators such as JAFZA and KEZAD
Warehouses earn fees per pallet or per order; labour is the largest cost.
Step 7: Parcel and last-mile delivery
Thin margin
DHL Express, UPS, FedEx, Amazon, Aramex, Delhivery, Blue Dart, J&T Express, Ninja Van
Cost per drop depends on density (drops per route) and failed deliveries.

Profit pool: who keeps the money

Where in the value chain the profit ends up, which is often not where most of the sales are. More on profit pools

The steadiest profits sit with scarce, hard-to-copy assets: ports and terminals under long concessions, and freight railways. Shipping lines earn huge profits in tight years and lose money in weak ones, because rates swing with the balance of ships and cargo. Forwarders earn modest but steady margins on few assets, while trucking, warehousing and the last mile are crowded, labour-heavy and thin.

Cost structure(5)

The main costs, each as a share of revenue (the money from sales).

Transport companies: running the service (fuel, drivers and crews, vehicles and ships, fees): About 76 percent of revenue for US-listed transportation companies[1]
Trucking: drivers, fuel, trucks and maintenance: About 79 percent of revenue for US-listed trucking firms[1]
Selling, general and administrative overheads: About 5 to 6 percent of revenue for US-listed transportation and trucking firms[1]
A container voyage: ship time and fuel: About 40 to 45 percent of voyage cost in the lesson's Asia to Europe example, with port and canal fees about a quarter and cargo handling about a third (illustrative)
Last mile: the driver's time: About half of a delivery van's daily cost in the lesson's Dubai courier example (illustrative)

Benchmarks(6)

Typical figures for the industry, to check a client's numbers against.

Operating margin, US-listed transportation companies: About 7.6 percent[1]
Operating margin, US-listed trucking: About 6.9 percent[1]
Operating margin, US freight railways: About 37 percent[1]
Operating margin, US-listed airlines (air transport): About 5.3 percent[1]
EBITDA margin, DP World (ports and logistics): About 26 percent in 2025 (adjusted EBITDA of USD 6.4 billion on USD 24.4 billion of revenue)[7]
Singapore port throughput: 44.66 million TEU in 2025, a record[5]

Typical cases(7)

Case prompts you might hear in this industry.

An online retailer in India wants to cut delivery cost per order.
Where should a consumer goods company put its Gulf distribution centre?
A container line's profit collapsed. Why?
A port wants to handle 20 percent more containers without new land.
A manufacturer's supply chain was hit by a shipping disruption. What should it do?
Should a freight forwarder buy a rival?
Should a courier in Dubai offer delivery time slots or pickup lockers?

Common traps(5)

Mistakes candidates make in this industry, and what to do instead.

Mixing up TEU and containers. A 40-foot container is 2 TEU.
Treating today's freight rate as permanent. Test the answer at much lower and higher rates.
Adding capacity when the real problem is dwell time or one slow step. Use Little's law first: cut the days each box waits and the same yard holds more throughput.
Looking only at transport cost in a network decision. Add stock held, duties, delays and route risk.
Ignoring the return leg, which is often empty or cheap, and forgetting that a longer route removes capacity from the whole market.

What changed, 2024 to 2026(6)

Recent changes a case could turn on.

The Strait of Hormuz: from 28 February 2026 a military conflict sharply cut traffic, to about five vessels a day between mid-July and late August 2026, almost 95 percent below pre-war levels; port calls fell about two thirds or more in Kuwait, the UAE, Qatar, Iraq and Bahrain.[10]
Gulf cargo found new routes: some food and goods were rerouted through Omani ports outside the strait, such as Salalah and Duqm, and overland via Saudi Arabia, with air freight for perishables at higher cost.[11]
The Red Sea: after attacks from late 2023 many carriers sailed around the Cape of Good Hope, adding days and absorbing ship capacity; a return of container services to the Red Sea is a key event to watch in 2026, and would release capacity and push rates down.[9]
Consolidation: DSV completed its purchase of DB Schenker in April 2025, creating one of the largest logistics groups; scale buyers now bargain harder with carriers, and smaller forwarders face pressure to merge.[8]
Hubs grew: Singapore, a transshipment hub where containers switch ships, handled a record 44.66 million TEU in 2025, up 8.6 percent.[5]
Reliability improved but stays low: global container schedule reliability rose each month from March to 64.7 percent in May 2026, its highest of the year so far but still 1.2 points below a year earlier, so shippers still plan for about a third of ships arriving late.[4]

Players by region(7)

Well-known companies in each region. You do not need to learn them by heart; they help you picture the market.

Global: MSC, Maersk, CMA CGM, COSCO, Hapag-Lloyd, ONE, Evergreen (container shipping)
DSV, Kuehne+Nagel, DHL (forwarding and contract logistics)
PSA International, DP World, APM Terminals, Hutchison Ports (ports)
Europe: Maersk (Denmark), MSC (Switzerland), CMA CGM (France), Hapag-Lloyd (Germany)
DSV (Denmark) and Kuehne+Nagel (Switzerland)
Port of Rotterdam
Middle East: DP World and JAFZA (Dubai)
AD Ports and KEZAD (Abu Dhabi)
Aramex (parcel and logistics)
Omani ports such as Salalah and Duqm
India: Adani Ports
Container Corporation of India (rail containers)
Delhivery and Blue Dart (parcel and last mile)
Southeast Asia: PSA International (Singapore)
J&T Express and Ninja Van (parcel)
Port Klang (Malaysia) and Tanjung Pelepas
United States: UPS, FedEx, Amazon (parcel)
Expeditors (forwarding)
Union Pacific and BNSF (freight rail)
Africa: Transnet (South Africa, ports and rail)
Africa Global Logistics (owned by MSC)
National port authorities and regional truckers

Words to know(13)

Linked words have a fuller entry in the glossary.

TEU (glossary entry): Twenty-foot equivalent unit: one standard 20-foot container; a 40-foot box is 2 TEU.
Shipper: The company that owns the goods being moved.
Carrier: The company that physically moves goods: a shipping line, airline, railway or trucker.
Freight forwarder (glossary entry): A company that organizes shipments and paperwork, buying space from carriers.
3PL (glossary entry): Third-party logistics: an outside company that runs warehouses and distribution for others.
Spot rate: The price for a shipment booked now, which changes week to week.
Transshipment hub (glossary entry): A port where containers switch ships to reach other destinations, such as Singapore or Jebel Ali.
Free zone (glossary entry): An area where goods can be stored and re-exported without paying import duties.
Dwell time (glossary entry): How long goods wait in a yard or warehouse.
Last mile (glossary entry): The final delivery to the shop or the customer's door.
Ton-mile (tonne kilometre): One ton of goods moved one mile (or one tonne one kilometre), the basic unit of freight work.
OTIF: On time in full: orders delivered complete and on time.
EBITDA (glossary entry): Earnings before interest, tax, depreciation and amortization: operating profit before the yearly cost of wearing out assets, often used for asset-heavy businesses such as ports.

Business model patterns

The ways of making money this industry follows. Spot the pattern in a new industry and you already know the first questions to ask.

Sources(11)

Facts checked on 30 September 2026. Worked examples are illustrative, shaped by these sources rather than one company's figures.

Go deeper and practise

Go deeper

The full lessons behind this brief, with sources and worked cases.

Practise it

Same pattern elsewhere

Industries that make money in a similar way. What you learned here carries over.