FedEx invests in Paris and develops network

In its next big move after the absorption of TNT, FedEx is expanding its Paris hub. FedEx has long had a presence in Paris whereas others have chosen the Netherlands, Germany or Britain as business friendly locations to support their pan-European Express platforms.

On Wednesday (18/10) it announced that it would invest €200m at its distribution hub at Paris-Charles de Gaulle Airport. This will pay for a new “automated sorting system for large, over-sized packages” designed to cope with the type of consignments generated by e-commerce. FedEx has also agreed to extend the lease on the site. The 25,000 sq m facility will become the second largest FedEx facility outside of the US, apparently larger than its equivalents in China. The company, however, will retain both the old TNT hub at Liege as well as FedEx’s facility in Cologne.

In keeping with FedEx’s affection for France it also announced the intention to open a “ground hub” north of Paris and three further transhipment depots. This is going to interface with the courier and local express companies that FedEx has been buying over the past five years. It appears that the objective is to link TNT’s network, which is strong in the UK, Netherlands and Germany, into FedEx’s French presence.

The one odd thing about this is that FedEx’s existing network in Europe is largely ‘Business-to-Business’. However if it is to fulfil what David Bronczek, CEO of FedEx Express, described during the announcement at the Paris facility as “the ability to pick up, transport and deliver an item from 95% of the people on the planet, and almost every business in the world, within one to two business days”, it will have to further develop its B2C last mile delivery capabilities to match its B2B capabilities.

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Source: Transport Intelligence, October 20, 2016

Author: Thomas Cullen