On Tuesday morning, it was announced that FedEx acquired Dutch logistics firm TNT Express. The takeover was approved by European regulators after they blocked a proposed buyout by UPS in 2013. The difference was that FedEx had less shipping and logistics market share in Europe before the move, but that is about to change.
The $4.8 billion acquisition of TNT Express will put FedEx in a very favorable position to compete against the bigger players in the European market such as Deutsche Post (DHL), UPS, and national carriers like La Poste in France and Royal Mail in the UK.
FedEx’s move comes at a time when the US dollar has become stronger compared to the Euro and the price of TNT’s shares have fallen since UPS’s offer. That advantage plus the natural integration of FedEx’s powerful air network and TNT’s “expansive” ground network make this a smart-looking deal to those in the industry.
Besides the advantages for the companies involved, this is another signal that shipping is becoming more and more globally integrated. Rather than handing off packages from one carrier to another in order to reach a destination half a world away, it’s becoming more efficient to ship that parcel with the same carrier from start to finish. Hopefully for the end user, this means lower costs and faster shipping times with less variation depending on where someone lives.