Dive Brief:
- FedEx has agreed to acquire Cargex, an international freight forwarding company, and Agencias de Aduanas Aduanamos S.A. Nivel 2, a customs brokerage company and Cargex affiliate, FedEx announced Thursday.
- The deal is expected to close later this year after closing conditions and a regulatory filing in Colombia, where the companies being acquired are based. The financial terms were not disclosed.
- "This acquisition perfectly complements the roundtrip Colombia-to-Miami flight recently announced by FedEx Express," Udo Lange, the chief operating officer and incoming CEO of FedEx Logistics, said in a statement.
Dive Insight:
Cargex has 79 employees and does $4.17 million in annual sales, according to Dun and Bradstreet. "With this acquisition, we will have access to an even larger global network, allowing us to help customers reach even more markets around the world," reads a statement attributed to two Cargex managers.
FedEx also said it sees the Latin American market as an important opportunity, with Lange calling it "a key market for us" in his statement. FedEx said the deal would strengthen its footprint in air freight forwarding and customs brokering in the region. Logistics companies have been showing interest in the Latin American market recently as e-commerce takes off in the region.
This is not FedEx's first acquisition of a freight forwarding operation. This past October FedEx struck a deal to acquire the Australia-based Manton, a company that worked in ocean and air freight forwarding and customs brokerage.
By acquiring these companies, FedEx gains the know-how on functions such as customs brokerage in other parts of the world, allowing it to more easily move into these markets.
This also falls in line with the ongoing trend of supply chain companies making acquisitions in an attempt to control more of the chain from planning to final delivery. This past April DSV announced a deal to acquire Swiss freight forwarder Panalpina, an acquisition that results in a freight forwarding behemoth — the fourth largest freight forwarder in the world.
When DSV announced this deal it said, "Scale remains one of the key competitive advantages in freight forwarding with significant operational and commercial benefits."
While Panalpina dwarfs Cargex and Manton, FedEx's acquisition of multiple freight forwarding companies in various global markets shows it is interested in scaling up these lines of business.
