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FedEx invests $350mn in UAE

The company supports the surging e-commerce and trade demands of the MEISA region

This enormous investment reaffirms the commitment of FedEx to economic growth, aligned with the UAE’s ‘National Agenda for Non-oil Export Development’ which aims to grow the nation’s foreign trade.

“The MEISA region is a priority market for FedEx. It is strategically located at the crossroads of major global trade routes connecting the East and the West, making it an essential multi-modal logistics hub for the world. FedEx is dedicated to investing in its infrastructure, networks, and solutions to foster socio-economic development, digital transformation, and innovation in the region,” affirmed Kami Viswanathan, President, FedEx Express, Middle East, Indian Subcontinent and Africa (MEISA), in a recent exclusive and expansive interview with Global Supply Chain following her earlier visit to Dubai in February 2024 alongside the top international and regional corporate brass to inaugurate the gleaming FedEx Hub in Dubai’s DWC (Dubai World Central-Al Maktoum International Airport).

“Our focus includes unlocking growth opportunities for e-commerce businesses, supporting SME expansion to global markets, and enhancing market access through our global air and ground networks,” she continued.

In the first part of the wide-ranging interview, Kami Vishwanathan fielded business-related questions for the growth trajectory of FedEx in the region. In the second part she addressed issue-associated questions concerning sustainability, CSR and DEI (Diversity, Equity and inclusion).

Global Supply Chain (GSC): You were in Dubai in February 2024 alongside the FedEx top brass, to inaugurate the new FedEx DWC Hub. Briefly explain the reason for, and significance of, this development, and the impact it will have on your operations.

Kami Viswanathan (KV): FedEx has made a long-term investment of more than US$ 350mn (AED 1.3bn) into the UAE’s economy through infrastructure and technological advancements in this new hub at DWC. It also supports the growing e-commerce and trade demands in the Middle East, Indian Subcontinent and Africa (MEISA) region and beyond.

Spanning more than 57,000sqm, the FedEx hub includes an automated sort system, currently capable of handling up to 9,000 packages per hour and equipped with a six-sided barcode reader and sorter. This sophisticated technology significantly enhances the efficiency, accuracy, and speed of package processing and distribution from the facility.

GSC: How significant is the MEISA region for global FedEx?

KV: The MEISA region accounts for approximately 45% of the world’s population and includes some of the world’s fastest-growing economies. Its significance lies in its potential for growth, strategic position in global trade, and increasing demand for logistics and transportation services driven by economic development and digital commerce.

The establishment of our new MEISA hub is a strategic move that is not just about expanding our network; but also enhancing the entire region’s connectivity and playing a key role in facilitating global trade and commerce, by connecting more than 220 countries and territories.

GSC: How did FedEx MEISA fare in FY-2023 and what are your performance expectations for FY-2024?

KV: We do not disclose financial results on a country or regional level in line with our company policy. However, in FY2023, FedEx Corp. ended the fiscal year with revenue of US$ 90.2bn. For FY-24, we project capital spending of US$ 5.4bn prioritizing efficiency improvements such as fleet and facility modernization, network optimization, and automation.

GSC: Comment on any further expansion plans in the region.

KV: The growing prominence of the MEISA region in the global economy is reflected in our vast network and strategic investments in the region. In alignment with our long-term vision, we are bolstering our commercial presence, to provide businesses with faster and more convenient access to international markets.

We recently launched our new FedEx Less-than-Container Load (LCL) Priority service, connecting the Asia Pacific with key markets in the Middle East. This one-stop multimodal ocean-road solution offers a customs-cleared port-to-door and door-to-door service with a strategic balance of speed and affordability, while providing a new benchmark in efficiency.

FedEx has also introduced innovative digital solutions including the new automated e-commerce capability in FedEx Ship Manager™, which supports small businesses and e-commerce merchants across the region to efficiently manage their shipments online.

FedEx has also been expanding in India. We recently announced a US$ 100mn investment in our first FedEx Advanced Capability Community in Hyderabad, highlighting our commitment to leverage exceptional talent in India to support digital transformation and innovation.

The company also recently launched the FedEx Life Science Center (LSC) in Mumbai that acts as a one stop shop for all clinical trial storage and distribution requirements of healthcare customers in India and those shipping to India from around the world.

The new Centre is the most recent addition to the current FedEx LSCs in Japan, South Korea, Singapore, the USA, and the Netherlands – making it a global network of storage and distribution depots to support our healthcare and pharmaceutical customers.

FedEx has also been investing in early-stage digital startups in India and the wider region, including a computer vision and AI company and a global circular supply chain solutions provider, through the FedEx Innovation Lab (FIL), showcasing our commitment to technological advancement.

GSC. What are the opportunities for FedEx in this region going forward?

KV: According to the recent ‘E-commerce Report in the MENA region’ released by EZDubai, the MENA e-commerce market is projected to reach a valuation of US$ 57bn by 2026. This forecast indicates a compound annual growth rate (CAGR) of 11% over the period spanning from 2022 to 2026. Meanwhile, Invest India reports that the Indian e-commerce industry is expected to surpass US$ 350bn in Gross Merchandise Value by 2030.

To support the growth of e-commerce sector, with a dual focus on meeting the needs of e-tailers and their end-consumers, we have enhanced our suite of offerings and added WhatsApp notifications to our FedEx® Delivery Manager International solution, which helps recipients customize their package delivery to fit around their busy schedules.

We also introduced Picture Proof of Delivery for express residential deliveries, ensuring peace of mind for e-commerce merchants and consumers regarding their package delivery.

GSC: How are new technologies and automation changing the landscape of the industry and how is FedEx adapting to these technological developments?

KV: At FedEx, innovation is embedded in our business strategy. We use advanced technologies and data-driven insights to set industry benchmarks. Our new hub at DWC is a prime example; its fully automated sort system, advanced barcode reading technology, and AI-equipped security screening facilities enable us to build a network for what’s next and stay one step ahead of our customers’ requirements.

In January 2024, we announced fdx, our data-driven e-commerce platform that connects the entire customer journey — making it easier for companies to grow demand, increase conversion, optimize fulfillment, and streamline returns. We also launched FedEx Import Tool (FiT) in India, which is another example of how FedEx integrates advanced technology and automation to address our customers’ specific needs.

FiT is designed to address the increasing complexities and volumes of imports, by transforming and simplifying the import process, enhancing efficiency, transparency, and the overall end-to-end shipment journey.

Across the logistics sector, we are seeing technologies like Artificial Intelligence (AI) open new possibilities for process efficiency and customer convenience. Our powerful, centralized data platform allows us to create solutions that enhance our customers’ abilities to respond and grow at the speed of commerce.

A notable example of smart supply chains is what we are doing at FedEx Dataworks. We have developed deep-learning models that consider shipping factors such as weather patterns and traffic conditions to provide more accurate delivery time estimates.

Part II

GSC: Tell us about the Sustainability and CSR initiatives of FedEx?

KV: Our sustainability approach and carbon emission reduction plans focus on three key ideas: reduce, replace, and revolutionize. We aim to mitigate the impact of our activities and operations,

replace older technologies and vehicles, and revolutionize our fleets and facilities with newer and more efficient technologies.

Our efforts to reduce emissions center around vehicle electrification and the use of sustainable energy and fuels. Through a phased strategy, we are working towards our goal of transforming the entire FedEx parcel pickup and delivery (PUD) fleet to zero-tailpipe emission vehicles by 2040.

Our hub at DWC is also a testament to our sustainability commitment. The facility aligns with Dubai Municipality’s Green Standard for sustainable building and regulation and features 100% LED lighting, charging infrastructure for commercial delivery vehicles, electric ground service equipment such as forklifts and employee passenger cars, and an intelligent building management system to automatically manage cooling and lighting.

It will also include solar panels that will generate approximately one megawatt of power. The excess power will be fed back into the Dubai power grid, supporting the increase of clean energy’s share in the city’s overall power grid.

Additionally, in keeping with our annual tradition to give back to society via community service, this Ramadan over 100 FedEx team members volunteered their time to pack more than 2,300 food packages, in collaboration with SmartLife Foundation in the UAE and Misr Life Makers in Egypt.

Moreover, our FedEx Cares Purple Totes Campaign saw team members support with more than 1,800 kilograms of much-needed food and non-food supplies for over 300 beneficiaries from non-profit organizations (NGOs) of their choice.

In India, we committed a US$ 10mn CSR grant to the famed Indian Institutes of Technology (IIT) in Bombay and Madras. This will contribute to the establishment of globally recognized ‘Centres of Excellence’ (COE) within both IIT campuses to spearhead research and development. The COEs will also nurture a dynamic talent pool, support fellowship programmes for Master’s and Doctorate students, and actively catalyze the growth of the country’s startup ecosystem.

Meanwhile, our Saksham (capabilities / skills in the Hindi language) initiative is helping more than 290 women small business owners in Mumbai expand their enterprises. The ‘Saksham Kit’ provides customized supplies for each beneficiary, and includes technology and tools to improve product quality, reduce production time, and help cater to more customers.

GSC: What role, if at all, has gender played in your personal rise at FedEx? What do you attribute your professional success to in breaking the proverbial glass ceiling?

KV: FedEx offers tremendous opportunities for high quality talent to succeed and thrive and the possibilities are limitless if you are driven, entrepreneurial and can deliver strong outcomes. We are an equal opportunity organization, and professional growth within the company is based on merit.

Diversity is of strategic importance to FedEx, and we are focused on creating a culture that promotes inclusion to foster greater collaboration, innovation, and business growth. FedEx is driving change at both corporate and sector level, and I am delighted to see more efforts being made to encourage gender equality and equity – although there is always more to be done here.

We offer various leadership and professional development programs to equip women with the skills and knowledge necessary to navigate the complexities of the logistics industry and ascend to leadership positions. These initiatives include leadership workshops, skill-building seminars, and executive training programs, all tailored to empower women and build their long-term careers.

GSC: Clearly, women are grossly under-represented in the logistics and supply chain sector. Why, and is that likely to change in the foreseeable future?

KV: Gartner’s 2023 Women in Supply Chain Survey finds that women now hold 26% of C-suite and executive leadership positions in the industry, which is a record-breaking figure. At FedEx, this is even higher with women making up 33% of our Board of Directors and 27% of our global management – showing that we have made significant strides in creating opportunities for women in logistics.

According to a report by McKinsey & Company, nine in ten women under the age of 30 want to be promoted to the next level, and three in four aspire to become senior leaders. While participation of women in the logistics sector continues to grow, providing training and mentorship, networking opportunities, and promoting flexible working conditions, serve as enablers in this regard.

GSC: What is the FedEx official position on this issue? Do you plan more representation for women in your workforce in the future?

KV: For the past several decades, FedEx has remained steadfast in its endeavor to create awareness on the vast opportunities available to women in the logistics sector, while also empowering them to advance their careers within the company.

FedEx has an Equal Opportunity Policy, ensuring no team member receives unfair treatment on the grounds of gender, age, or nationality when applying for a position or accessing mentorship or development opportunities. FedEx also has a Diversity, Equity and Inclusion Council which helps build on existing initiatives and programs and continually identifies areas for improvement. At the heart of this commitment, gender equality lies in training, mentorship and support for women, helping them progress through the ranks and providing them the tools for success – helping prepare women team members for management roles.

GSC: What can the logistics, supply chain, transportation sectors do to make employment more attractive for women?

KV: Attracting more women to the sector requires a multifaceted approach, focusing on creating an inclusive and supportive work environment and promoting good work-life balance through flexible work schedules and remote work options.

Career development opportunities also play a critical role; by establishing mentorship programs and providing access to training, companies can foster career growth and encourage more women to aspire to leadership positions.

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