FedEx’s take-over bid for TNT is part of a larger scheme, says David Binks Regional President FedEx Express Europe. As for the role of TNT’s Liege Airport hub: yes, there is room for one more.
As from the settlement date of the merger, David will join the TNT Express Executive Board as CEO. But in the chat with CargoForwarder Global he is still wearing his present cap. “You mustn’t
forget, he says, “that since the 1990ies we have been constantly expanding our high-quality network in Europe. Our aim was to get closer to our clients. So far we have opened over 100 new
locations in Europe.”
Apart from that FedEx has also finalised a number of acquisitions, among which Tatex in France, Opek in Poland and ANC in the UK. “We have been gradually integrating this business, which has allowed us to increase our customer base.”
The road operations are a mix of a very high standard of quality provided by FedEx’s own courier and station employees as well as local contractors of which FedEx ensures that their quality is of the highest level.
TNT is an excellent fit
And then, last April, came the announcement that FedEx planned to take over TNT Express. “This will, of course, broaden this ‘just European’ view. We believe that TNT is an excellent fit for us. It is a strong brand, with a strong culture and a high-quality reputation. They operate a strong road-based network and are present in many markets.”
Even today, FedEx operates a huge European hub at Roissy-CDG, along with gateways in Frankfurt, Cologne and Stansted. “We also fly directly from Milano-Malpensa to Memphis,” adds David.
So what about Liege Airport?
“LGG is an excellent facility, on an excellent location. Its relationship with the airport authority is good, its team is very good. So we see this as a significant part of our network, which we plan to operate just as we operate CDG.” He also calls for caution, though: “The deal is not closed yet and any planning in the pre-close stage is not compliant with the merger talks.”
In a former set-up, David was also responsible for EMEA and the Indian Subcontinent, but this is no longer the case. “Europe on the one hand and EMEA/Subcontinent on the other are now 2 separate regions, reflecting the substantial growth in the latter. We have recently invested in India as well as South Africa.”
´Enhancing B2C presence
FedEx’s expansion strategy is both geographically and eco-demographically driven. “We are offering more and more domestic services, among which a service-based European economy solution versus (the more expensive) air freight.”
And, of course, there is e-commerce. “We have a strong presence in the B2C markets in North-America and some other parts of the world. We also participate in some B2C markets in Europe, but we lack the scale to be a major player there. Joining forces with TNT may be one of the opportunities to be able to be more competitive.”
FedEx can also boast a broad range of customers emerging from a policy of vertical specialisation. “We are interested in health, luxury goods, automotive and aeronautical to name just a few. In these segments you have to be able to respond to specific needs.”
Europe is a growth area
The merger with TNT would make FedEx a third strong player in Europe, a market in which David strongly believes. “Europe is an important growth area. More stability and confidence are coming back. We see encouraging signs on the European continent. This has to be fit in into the global business of FedEx, which was originally based in the US and was later expanded into Canada, Latam, EMEA –hence the hub in Dubai- and Asia-Pacific.”
When the merger is finalised the European HQ of FedEx, now base within the heart of Brussels, will eventually move to Hoofddorp near Schiphol. “As TNT is the larger partner in Europe. For the rest it is too early days yet to decide on positions, roles, the ‘where’ and the ‘who’. There is only a degree to which we can do some detailed planning.”
Both FedEx and TNT are diligently working on this process, so that the deal could be closed in the first half of 2016. Europe too has its role to play. “The EC is carrying out some detailed analysis. They should be able to do this on the right level of due diligence.”
Marcel Schoeters in Brussels