CMA CGM is reportedly nearing a $1.4 billion acquisition of FedEx Supply Chain, a move that would significantly expand the French company’s U.S. contract logistics business while continuing FedEx’s effort to streamline its operations.
According to the Financial Times, the companies are in advanced negotiations and could announce an agreement as soon as Wednesday.
Expanding its logistics business
FedEx Supply Chain operates warehousing, fulfillment, transportation management and reverse logistics services for customers across multiple industries, including retail, healthcare and consumer products. The business was built around FedEx’s acquisition of Genco Distribution System in 2015.
The acquisition would add another major logistics business to CMA CGM’s portfolio. Since purchasing CEVA Logistics in 2019, the company has steadily expanded into warehousing, air cargo, port terminals and e-commerce fulfillment as it builds a broader transportation and logistics network.
The Financial Times also reported that the companies are expected to establish freight-forwarding partnerships linking FedEx’s air cargo network to CMA CGM’s ocean shipping business over the coming years.
FedEx continues narrowing its focus
For FedEx, the reported sale follows last month’s spin-off of FedEx Freight into a standalone public company and continues the company’s effort to simplify its business.
If completed, the acquisition would give CMA CGM a much larger presence in North American contract logistics by adding FedEx Supply Chain’s warehousing and fulfillment network to CEVA Logistics.
The deal would also continue a wave of consolidation across the logistics industry, as providers look to offer customers a broader mix of transportation, warehousing and fulfillment services through a single provider.
