FedEx eyes potential of TNT’s Middle East road network

US logistics firm FedEx announced its takeover of Dutch competitor TNT.

A FedEx delivery truck is seen in San Diego, California December 5, 2013. REUTERS/Mike Blake

A FedEx delivery truck is seen in San Diego, California December 5, 2013. REUTERS/Mike Blake

REUTERS/Mike Blake

Thursday, May 26, 2016

DUBAI: US logistics firm FedEx announced its €4.4 billion (Dh18 billion) takeover of Dutch competitor TNT on Wednesday.

Both companies operate in the UAE, where FedEx has its regional hub at Dubai International Airport. TNT’s regional headquarters is also in Dubai.

Speaking at a webcast press conference, David Bronczek, CEO of FedEx Express, said integration would begin immediately, but in the near term both companies would continue to operate.

“This transaction is one of the most strategically important in FedEx history,” he said, saying that the firm would now number 400,000 employees around the world.

He declined to give a timescale for the two companies’ integration, but said the acquisition would affect operations around the world, including the Middle East.

Responding to a question from Gulf News, David Binks, FedEx Express regional president for Europe, Middle East and Africa, said, “We talk an awful lot about the strength of TNT here in Europe, and obviously this is the strongest region, but TNT has great strengths in other parts of the world, particularly in Asia-Pacific, in South America, but also in the Middle East.

“We talk a lot about the European trucking network, which I think Tex [Gunning, CEO of TNT Express] refers to as the jewel in the crown of TNT. We should not forget about the excellent trucking network that TNT have established in the Middle East and also in South-East Asia, which will be notable additions to our network and will give us more opportunity to get more customers to more of a network solution of both express and ground-based services.

“So the integration, while the majority of the work will be European, there’s also a significant integration activity and programme that will need to take place in other parts of the world. We see this very much as a global effort.”

Binks said the European express market was worth €53 billion. Globally, eCommerce was expected to grow by 15 per cent a year, and would reach €600 billion in 2017. He said the TNT acquisition was aimed at capturing a larger share of that growth, and firm expected minimal redundancies.

FedEx employs 700 people in the UAE, where it has five stations, and Bahrain and Kuwait, where it also operates direct express services. It serves Saudi Arabia through a local partner, the Abdul Latif Jameel Group.

It operates 44 flights through Dubai International Airport. Bronzcek said its total of 657 aircraft made it the fifth largest airline in the world. TNT was obliged by regulators to sell its air fleet before the acquisition went through.

“The acquisition of TNT will change the way customers view FedEx around the world,” said Frederick W. Smith, Chairman and CEO of FedEx.

By Andrew Staples Chief Business Reporter

Gulf News 2016. All rights reserved.

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