FedEx is not the biggest logistics provider in the world, or the U.S., but that doesn’t stop them from trying to compete and continue to grow. Their latest move involves acquiring GENCO, a third-party logistics provider that has more than 130 warehouses in North America. This places FedEx in a better position to deliver products and services to their customers at a cost savings.
GENCO serves customers in the healthcare, technology, and retail industries. FedEx plans to transform their supply chain solutions by using the strategic services GENCO brings to the table. GENCO is an expert in warehousing, packaging, returns, inventory liquidation, and transportation logistics. Since 1898, GENCO has been providing supply chain solutions and this makes them a great asset for FedEx.
Chairman and CEO of FedEx Corp, Frederick W. Smith, stated in the press release, “The acquisition of GENCO will transform our global portfolio through the addition of new best in class supply chain management services… As e-commerce continues to grow, customers of both companies will reap the benefits from the broadened capabilities and powerful new services.”
The GENCO name will no longer be used, but FedEx is keeping a large chunk of GENCO’s employees during the acquisition. Chief Executive Officer of GENCO, Todd R. Peters, will remain an advisor for FedEx. Details about specific employees were not included in FedEx’s press release.
GENCO has revenue around $1.6 billion, meaning that FedEx had to put up a sizeable amount to acquire this logistics provider. However, the actual purchase price was not disclosed. FedEx has been growing rapidly since 2012 when they underwent a major restructuring. With GENCO as a new partner, FedEx is set to increase their revenue again. Currently, FedEx has annual revenue of $46 billion. Projections for 2015 are higher.