FedEx Express India, a division of the $36-billion FedEx Corporation, is looking at organic and inorganic growth in India. The company in India provides express delivery, courier and shipping services, by a definite time and date, with a money-back guarantee. Kenneth Kovel, vice-president, FedEx Express India, in a tete-a-tete with FE?s Nikita Upadhyay, discussed the company?s expansion plans, integration of acquired divisions of AFL and growth strategy for the year 2011.
Last month, you acquired Mumbai?s AFL. How does AFL fit into your growth targets?
We hope to close the AFL deal in February 2011. It will help us to expand our domestic coverage and give us another business segment to look at ? supply chain and logistics. AFL?s affiliate company, Unifreight India, will also give us a good growth platform in the coming years. The year 2011 will be important for us as we will integrate AFL and Unifreight with FedEx. With this, reverse logistics will be an area where we will be able to participate in.
What will be your areas of focus in the new year?
We have three major things to be done next year. First is that we are looking at adding additional capacity, primarily at our Delhi gateway. We have three gateways in India ? Delhi, Mumbai and the Bangaluru, which is very recent one. Delhi flights are full. We have talked about this to our board and they will take a decision on that. A possible solution to this could be either to own our own aircraft out of Delhi or to reroute some more flights through this city.
Next on the list is to have a better connectivity with out Asian hub. Currently, we don’t connect to our Asian hub, so we are looking at a flight that would connect us to that. Lastly, we will have to ensure better connectivity for our domestic packages by integration of AFL?s logistics business.
Are you looking at expanding your services bouquet for the Indian market?
Yes we are. We have recently launched FedEx import services, wherein an importer can pay for in-bound shipments in rupees. We are looking at increasing our domestic gateways and have reached 331 destinations in India. We are a big player in the international express business. International time bound priority package is the most profitable business for us. However, domestically, we are currently a smaller player. AFL acquisition makes us bigger in this space and increases our coverage too. So, this will translate into a bigger year-on-year growth for us.
What makes you bullish about express business in India?
We have seen a growth of about 30% in our FY10 shipments over FY09. In India, as of September, exports on a year-on-year grew by 20% and imports by over 26%. India is a developing country with third largest GDP in the world. AFL acquisition gives us a great growth potential in the domestic market by expanding our coverage. With this, we can now offer wider portfolio of services for both in-bound and out-bound packages.