In a matter of a couple of months, FedEx has snapped up its third acquisition – this time however, in Brazil. The company acquired Rapidao Cometa Logistica e Transportes SA, its authorized representative in Brazil for 11 years for an undisclosed amount. According to FedEx’s president of FedEx Express in Latin America and the Caribbean, “FedEx will now be able to provide a more comprehensive portfolio of services in Brazil, including international air express, domestic ground and value-added services such as supply chain and logistics solutions”.
Rapidao Cometa Logistica is considered one of the largest logistics providers in Brazil with 770 vehicles and trailers, 45 branches and 9,000 employees. The company offers logistics services such as inventory management and order fulfillment, air freight and ground services, B2C delivery services and of particular interest, pharmaceutical logistics services.
An interesting but logical acquisition, Rapidao Cometa Logistica will allow FedEx to further expand into the Latin American region, an area in which they’ve been active in for quite some time. The acquisition will also allow the company to advance its logistics capabilities into the Latin American market. Although the company performs logistics services for existing customers, these services have never been promoted to the extent as the company’s transportation capabilities; however, there seems to be a renewed interest in these services within the company. If they chose to do so, FedEx could easily rival other logistics providers in the Brazilian market such as CEVA and Penske Logistics particularly within Brazil’s automotive and high tech manufacturing markets.
While UPS’ TNT acquisition allowed it to also reunite with its former Brazilian representative, UPS’ logistics offerings in the region are perhaps not as strong as other providers’ solutions, maybe putting it at a slight disadvantage to the likes of FedEx, CEVA and Penske Logistics. Still, its road transportation network, thanks to TNT, linking Brazil, Chile and Argentina is a definite transportation advantage.
Perhaps these recent acquisitions are FedEx’s reply to UPS’s TNT purchase however; the logistics industry is ripe for the taking thanks to a questionable global economy. Although Brazil escaped the 2009 recession relatively unscathed, its economy is now slowing but its potential is still great. An expanding middle class, a top manufacturing location for automobiles and the 8th largest pharmaceutical market in the world makes this country a desirable one for logistics providers.