FedEx invests more in Africa, as ‘growth is here’
Global courier and logistics company FedEx is expanding in SA and the rest of Africa, saying a rise in e-commerce and population growth on the continent will help drive its business.
The group said this week that for the first time, it would be using its 100-ton-capacity Boeing 777 aircraft in Africa to transport goods across the continent and to the rest of the world.
Mike Higley, FedEx vicepresident for Southern Africa told Business Day in an interview: “The growth is in Africa. The possibility is in Africa. This aeroplane is landing in Johannesburg and connecting to the rest of our network, which connects to the world.”
“It’s a big investment for us. It shows we’re bullish on Africa. There’s a huge opportunity here. We want to be part of it.”
Valued at $42,23bn, FedEx is considered to be one of the largest courier companies in the world and ranked as one of the top three on 2018’s Forbes Global 2000 transportation list.
Johannesburg will act as a hub for the region connecting five countries, soon to be eight, via road transport, which feeds into SA as the main hub. Goods are then transported from there to the rest of the world.
By going from Johannesburg to Dubai and then on to San Francisco, Higley said a package could travel from SA to the US through the FedEx network in as little as two days.
With six out of 10 of the fastest-growing economies in the world in Africa, Higley said FedEx was particularly excited by the high GDP growth on the continent.
The company also pays attention to the development of trade in the region and is excited about the prospects of the African Continent Free Trade Agreement (AfCFTA). With lower barriers to trade such as taxes, import duties and more open borders, such a policy could greatly increase the amount of goods shipping to, from and across borders in Africa.
Higley said a growing population and the rise of ecommerce are likely to be big drivers for the business.
FedEx sees the extensive road network on the continent as an asset to the growth of ecommerce as packages always need to be delivered through the “the last mile” to reach their final destination.
“We can provide our clients with capacity and the ability to move products and commodities they have been unable to move in the past because of restrictions on passenger aircraft, for example.
“Oversize freight and dangerous goods can now move on our aircraft,” he added.