FedEx targets double-digit growth in Central and Eastern Europe

FedEx Express is targeting double-digit growth in Germany and the rest of its Central and Eastern Europe region, and does not exclude further acquisitions to achieve its goals, senior executives told CEP-Research. The integrator will continue to focus on international air express and does not plan to enter the German domestic market, however.

“We are on an expansion path. We want to be the preferred partner for international time-definite shipments,” said Michael Mühlberger, FedEx Express Vice President Operations Central and Eastern Europe, in an interview. He was speaking after the press conference to announce the transfer of FedEx’s Central and Eastern Europe hub from Frankfurt to Cologne in 2010.

FedEx had invested strongly in Eastern Europe in recent years, setting up own organisations in Poland, the Czech Republic and Hungary and launching own flights to the three countries, he noted. In other countries, it is represented by Global Service Partners (GSP).

In future, FedEx wanted stronger links with these partners. “For those partners where we are convinced about their quality, we want to bind them with strong contracts or through acquisitions,” Mühlberger said. Following the recent acquisition of Hungarian partner Flying Cargo, however, no other acquisitions were currently pending, he stressed.

FedEx was seeing a trend for some industries that had set up production in countries such as Poland and the Czech Republic to respond to rising cost levels there by moving further east towards cheaper countries such as Romania, he noted.

“We want to grow at double-digit rates in the future,” said Bernhard Schloemer, Managing Director Operations for Germany, in an interview. “Organic growth will be important but we will keep our eyes open if there are opportunities which fit us,” he added.

FedEx will maintain its strategy of focusing on intercontinental and intra-regional air express, and does not plan to enter the domestic market, Schloemer emphasised. “Our focus will remain on international express. That is our strength and where we can best serve our customers. Domestic does not play a role for us.”

While intercontinental express shipments between Europe, the USA and Asia remain the core products, FedEx is also seeing double-digit growth rates for shipments within Europe, he pointed out.