FedEx is gearing up for the e-commerce boom

FedEx’s move on TNT Express and the continuing expansion of distribution facilities in the United States will help the company to gear up for the anticipated e-commerce boom. FedEx’s plans to buy TNT Express for $4.8 billion (EUR 4.4 billion) will not only boost the its overall size, but will also give it greater penetration in the fast-growing e-commerce sector, where the Dutch company’s expertise and strong European road delivery network will bring significant advantages.

In the United States, meanwhile, FedEx’s decision to ramp up its package processing capabilities in Albuquerque has also been seen by local media commentators as part of its preparations for more  e-commerce business. The company is building a new 183,000-square-foot facility that will replace two existing buildings that together offered 75,000 square feet.

E-commerce is seeing impressive growth in the United States. The latest quarterly report from the Census Bureau of the US Department of Commerce showed that total e-commerce sales for 2014 were estimated at $304.9 billion, up by more than 15% on 2013.

But event those impressive statistics pale in comparison to the rate of growth in China where, according to a report published last week by the China E-Commerce Research Center (CECRC), the e-commerce market increased by 31.4% in 2014 to reach $2.2 trillion (13.4 trillion yuan). While business to business (B2B) transactions accounted for the bulk of these sales, the sector which saw the biggest jump was online retail, where volumes almost doubled. Interestingly, Chinese’s e-commerce sector is an area where TNT has notched up some impressive results, through agreements with the likes of Tencent, Alibaba.com and Youshang.com.