FedEx charts a brand new path to “shield itself” from huge field retailers

FedEx charts a brand new path to “shield itself” from huge field retailers

In the US, FedEx lost with the departure of Amazon, which decided to handle its own logistics. In Brazil, other large companies such as Magalu, Mercado Livre and Via have done the same. The exit? Seek capillarity

A giant of express deliveries valued at US$ 45.8 billion, the American FedEx found itself at a crossroads in 2018, when Amazon, one of its major customers, accelerated the project to internalize its logistics. In response, in 2019, the company ended its contract with the company founded by Jeff Bezos.

Guilherme Gatti closely followed this situation. After joining as an intern at the local FedEx office in 1992, he rose to different positions until he was transferred, in 2004, to the United States. And he only returned to Brazil at the beginning of this year, to take over as the group’s main executive in the country.

Now, Gatti is using that baggage to chart new paths for FedEx Brasil, which faces a similar context of competition. This path involves investments in fronts such as capillarity and efficiency. But it will not hitch a ride on the itineraries drawn by third parties.

“We have already seen this happen. The big marketplaces will internalize their logistics”, says Gatti, vice president of operations for FedEx in Brazil, when NeoFeed🇧🇷 “So, we have to be careful not to mobilize a very large structure that will have to be deactivated because the client has become a competitor.”

To prevent this history from repeating itself, FedEx recently delivered an investment package. Among other resources, it includes two new units in Campina Grande (PB) and Petrolina (PE), equipment and systems that expand automation in its branches and the addition of destinations in its international transport area.

From the first to the last mile, the list of new FedEx rivals in the country includes Mercado Livre, Magazine Luiza, Via, Americanas and Amazon itself. These groups have invested organically and in M&As to structure their logistics networks and serve sellers in their marketplaces.

In one of the recent movements of this race, Amazon made its first inorganic investment in the country when, in July, it bought a 9.68% stake in the Brazilian company Total Express, specialized in the delivery of goods.

There are examples of acquisitions of other companies. Mercado Livre bought Kangu, also focused on the last mile. Magazine Luiza incorporated Logbee and GFL. At the beginning of the year, Via acquired logtech CNT.

FedEx has been on this road longer. In 2012, the company bought Rapidão Cometa from Pernambuco and, in 2016, TNT, which already had a considerable structure in Brazil. With the transactions, the group took a step forward in its local operation, which until then consisted of 500 professionals and was more restricted to transport.

Today, there are around 12,000 employees distributed, among other structures, in nine large logistics hubs and around 100 branches, which serve approximately 5,300 locations, with the support of its own fleet of 2,900 trucks, trailers and vans.

In the second half of 2022, this network has been reinforced as part of the preparation for the year-end calendar, with Black Friday and Christmas. But the rational goes far beyond this season.

Guilherme Gatti, Vice President of Operations for FedEx in Brazil

“We have an additional structure with transport and temporary partners, followed by a demobilization in January and February”, says Gatti. “But in terms of logistical structure, we will leave stronger in March 2023 than we entered in September of that year.”

In this line, the most recent projects are the new branches in Campina Grande (PB) and Petrolina (PE). The two units have, respectively, five thousand and four thousand square meters.

Another opening involved the center in Conde (PB), in an area of ​​more than seven thousand square meters. This capacity is 20% greater than the two structures that the unit replaced, located in the same city and in João Pessoa.

The consolidation of two smaller branches in Vitória (ES) also led to the opening of a structure in Serra (ES). At 46,000 square meters, this is the second largest FedEx center in Latin America. The first is in Cajamar (SP), with 50 thousand square meters.

heading inland

By expanding the company’s capillarity, these units function as advanced points to allow for faster deliveries. In this direction, the advance in regions such as the Northeast and the interior of the country is one of the focuses of the group to differentiate itself from its peers.

“The logistics infrastructure in the Northeast is challenging”, says Gatti. “But as we already have a strong presence in the region, our cost per package is lower and we end up being more competitive.”

This logic has helped FedEx to reactivate its relationship with former customers. “We’ve seen some marketplaces that internalized their networks and now say they don’t know how to do it and are returning to our portfolio”, he says.

Gatti observes that, in the case of large marketplaces, the group “turns on the faucet” when it has available capacity, but does not expand its structure based on these customers. And within this posture, which he classifies as more responsible, FedEx has divided its revenue into other mats.

“One focus is the e-commerces owned by big brands”, he says. He cites technology, fashion, footwear, cosmetics and home appliances as the sectors with the greatest demand. “And we have seen strong growth in SMEs, which do not want to depend only on marketplaces.”

The quest for productivity has also guided other recent initiatives in the country. FedEx invested in 11 sorters – systems and equipment that automate order picking according to destination. They were installed in the Feira de Santana (BA) and Recife branches, in addition to a system in the centers of Salvador, Fortaleza, Curitiba, Porto Alegre, Belo Horizonte, Goiânia and Guarulhos (SP).

FedEx has also been expanding the international network dedicated to Brazil. The group already had a B767-300 plane, which makes 6 direct weekly flights between its base at Viracopos airport, in Campinas (SP), and its global hub in Memphis, in the United States.

Recently, the company closed deals with companies like Latam and Lufthansa to add 19 weekly flights to places like Europe, Colombia, Peru, Ecuador and Mexico. In November, FedEx included Dubai in this map and, in December, it will be the turn of Santiago, Chile.

“Once we arrive at these locations, we inject the package into our network and reduce delivery time”, says Gatti. “Dubai, for example, has been the gateway for exporting Brazilian cosmetics to the Arab countries.”

Source: Neofeed

Related post

Wake, from Locaweb, bets on e-commerce for giant retailers

Wake, from Locaweb, bets on e-commerce for giant retailers

Locaweb is starting an unprecedented movement in its history, entering the market of e-commerce platforms for large companies with its Wake…
Incentive campaigns are options for retailers with Selic above 13% pa

Incentive campaigns are options for retailers with Selic above…

* By Rodolfo Carvalho The Brazilian socioeconomic reality has demanded a considerable effort from national companies, essentially those operating in industry…
Americanas “closes the field” with elevated deadline for assortment of collectors

Americanas “closes the field” with elevated deadline for assortment…

Americanas gained another breath to settle the last details of the company’s recovery process with the creditors, which includes a capitalization…

Leave a Reply

Your email address will not be published. Required fields are marked *