India is among top 3 fast-growth markets for us: FedEx's Richard W Smith

Smith, the COO, international, and CEO, Airline FedEx, said express transportation firm unveiling its fourth international daily flight connecting India to the rest of world

FedEx, one of the world’s largest express transportation companies, is scaling up operations in India, which is among the top three growth markets for the company, said Richard W Smith, chief operating officer, international, and chief executive officer, Airline FedEx. In a video interview with Peerzada Abrar, Smith said the US-based firm, which earned revenue of about $88 billion in FY24, is exploring the India market for setting up air cargo hubs for better connectivity. He said the firm is also officially inaugurating its fourth international daily flight connecting India to the rest of the world this week. Edited excerpts:

 

What are FedEx's expansion plans in India?

 

India is an exciting and dynamic growth market for us. We continue to invest in this market. To date, we've invested over a billion dollars in connecting India to the world. We launched a fourth international daily flight on November 5, my birthday, which connects India to our broader network serving 220 countries and territories. The official unveiling of that flight is on November 19. We have the largest cargo airline on Earth. These four daily flights or 46 weekly flights are crucial for accelerating growth in this market. We expect our top-line revenue in India to more than double in the next three years, growing faster than the Indian market itself.

 

Any new investments planned in India?

 

We are exploring the India market for air cargo hubs and looking to establish a new hub that will connect intra-India and regional markets to the rest of the world. This would be the first fully automated FedEx cargo hub in India. While I can’t provide exact numbers on staffing or investment, it would align with similar hubs we have in other markets globally.

 

What is FedEx's role in strengthening India's logistics infrastructure?

 

Globally, FedEx contributed over $85 billion in direct economic impact in FY24. India is one of our top three growth markets, alongside Mexico and Vietnam. FedEx moves about $2 trillion of goods annually, roughly one-eighth of global trade. This capability helps fast-growing markets like India connect to the world. We see significant growth in southern India, particularly in sectors like high-tech, electronics, automotive, e-commerce, and healthcare.

 

What opportunities are you looking to tap in India, including e-commerce and healthcare?

 

We see opportunities across various sectors. Our vast network and expertise help customers manage their supply chains better. We are investing in high-tech, automotive, e-commerce, healthcare, and aerospace. Our customers span all these industries, which are growing rapidly in India.

 

India is a price-sensitive market. Are there any plans to modify pricing?

 

India is a challenging market, especially domestically and in e-commerce. That’s why we invested $100 million in Delhivery, our partner for lower-value e-commerce shipments. While yield challenges exist, the value of goods is increasing, making the yield challenge easier to solve. As advanced manufacturing grows, we expect more premium shipments, driving up yields.

 

How is FedEx leveraging data and technology to serve customers better?

 

India is a key market for digital innovation. Our new CEO, Raj Subramaniam, has focused on unlocking the power of our data. We move 16 million shipments daily, making us data-rich. We have invested $100 million in our Advanced Capability Community in Hyderabad, further committing to innovation and talent development in India.

 

What are your plans for drones and robotics?

 

We are rapidly automating our hubs worldwide, including plans for India’s first fully automated domestic hub. While smaller drones are inefficient for last-mile delivery, we see value in larger drones for the middle mile, especially in challenging environments like during monsoon season. We have partnered with companies like Elroy Air, which has a drone capable of carrying a 500-pound payload.

 

What challenges do you foresee in the India market?

 

India was traditionally a challenging market, but Prime Minister Modi’s reforms, particularly the Goods and Services Tax (GST), have streamlined business processes. This has unlocked much of India’s growth potential. While challenges remain, the regulatory landscape has improved significantly.

 

Do you expect trade to improve between India and the US under the new Trump administration?

 

Yes, I believe so. Given the geopolitical tensions between the US and China, there’s a natural alignment between India and the US as democratic nations. Strengthening trade ties between the US and India would be mutually beneficial, especially as India stands to gain from the shifting global landscape.