FedEx Corp., the global courier delivery services company headquartered in Memphis, on Wednesday announced the successful integration of its acquired Indian logistics companies AFL Pvt. Ltd and Unifreight India Pvt. Ltd.
FedEx had bought these two firms in November 2010 for an undisclosed sum.
Following the integration, FedEx said it has expanded its services coverage from 4,000 postal codes to over 19,000 in India. The US firm now has a fleet of over 1,000 trucks and has added warehousing space over 900,000 sq. ft.
“In a little over a decade, India is expected to have as many as 18 mega-demand cities with a GDP (gross domestic product) surpassing $20 billion. This is why we have expanded our network to over 90% of India’s manufacturing GDP, thereby providing seamless access to Indian businesses with diverse logistics needs,” said David Canavan, vice-president, operations, FedEx Express India.
The integration by FedEx comes at a time when India needs to step up infrastructure creation in the logistics sector. Logistics infrastructure and services in India have not developed adequately to support the economy and an increase in foreign merchandise trade, which rose from 20% of gross domestic product in 2000 to 42% in 2012, said a 3 April report by consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd.
This growth has been accompanied with a phenomenal rise in the volume of freight traffic movement over the period, the report said. As per a McKinsey and Co. study, inefficiencies in logistics infrastructure cost the Indian economy an extra $45 billion, about 4.3% of GDP, every year. Freight traffic will multiply 2.5 times growth by 2020 from the 2010 levels, further straining India’s infrastructure.
AFL was in 1945 appointed by Tata Airlines (now Air India Ltd) as its first cargo agent. The firm was also a pioneer of courier services in India in 1979.
Unifreight India was acquired by AFL in 2008.
Canavan of AFL said integration of AFL and Unifreight is critical for the company to offer one-stop logistics solutions.
India has always been an attractive destination for logistics firms. Bonn, Gemany-based courier and logistics company DHL Express started consolidation in the country by acquiring majority stake of Mumbai-based Blue Dart Express Ltd in 2005.
The Netherlands-based TNT NV acquired Secunderabad-based road express company Speedage Express Cargo Services, a unit of Associated Road Carriers India Ltd, in 2006.
