FedEx Express, a unit of American transportation giant FedEx Corp., on December 9, 2021 said that its strategic alliance with domestic logistics firm Delhivery, signed in July this year, has become operational. FedEx Express is the subsidiary of Fedex Corp.
FedEx Express’s strategic alliance transaction has taken effect following the fulfilment of closing conditions including regulatory approval from the Competition Commission of India, the subsidiary of Fedex Corp said in a statement.
In July this year FedEx invested $100 million in logistics services provider Delhivery, one of India’s unicorn startups that are set to go public soon.
Following the completion of the deal, Don Colleran, President and CEO of FedEx Express, will be nominated to the Delhivery Board of Directors, further strengthening the close working relationship between the two companies, it said.
FedEx experience to boost Delhivery’s growth
With this transaction, FedEx Express brings decades of experience as a global leader in logistics together with Delhivery’s Indian footprint and technology solutions, Colleran said.
FedEx Express said this transaction combines the FedEx global network with Delhivery’s extensive pan-India network and technology solutions to bring the best of both worlds together.
The investment and the commercial agreement between the two companies deepens the FedEx commitment to the India market, and signals a significant step in providing innovative services and solutions that aim to improve speed, efficiency, and access for FedEx and Delhivery customers, to unlock India’s international trade potential, the company stated.
Third Party Logistic Market in India
According to various reports, the Indian third-party logistics (3PL) market is slated to witness high growth in the coming years. UK-based market research firm Technavio report states that the 3PL market in India is poised to grow by US$10.74 billion in the period 2021-2025, progressing at a compound annual growth rate (CAGR) of almost eight percent, and witnessing an incremental growth of US$81.73 million by 2024.
The market structure is expected to remain fragmented during the forecast period. Vendors operating in the market are adopting various marketing and growth strategies such as competitive pricing to compete in the market.
Increased focus on core businesses by large clients and outsourcing logistics to third party logistics market makes warehousing an important market.
This, in combination with the reformation brought about by the goods and services tax are likely to boost the expansion of this sector in India. The market value of warehousing across the country was estimated to reach almost six billion US dollars in fiscal year 2025, from 2.1 billion dollars in fiscal year 2018.
