Bongo and Genco may sound like the name of a circus act, but in fact Genco is a US-based 3PL specializing in reverse logistics, while Bongo International, also US-based, specializes in cross-border e-commerce technology and solutions. Both were recently acquired by FedEx.
Of the big three integrators, FedEx has historically been the least involved in the forwarding and logistics business. In the words of founder, President, and CEO Fred Smith: “In years past, we were not particularly enamored with the so-called 3PL business because it was a relatively low-margin business that saw a lot of loss of contracts on the first renewal. It was more of a commodity-type of business and one of the big sales pitches of a lot of 3PLs was that they were ‘carrier-agnostic’ in terms of the transport system that they used.”
So what has changed to persuade FedEx to make the two acquisitions now?
- Regarding Genco, Fred Smith said: “What, of course, has happened over the decades since we expressed those remarks is the entire logistics and retailing sector has changed, particularly with the emergence of e-commerce and the ‘empowered consumer’, with mobile phones and electronic devices that allow them to order and move their shipments around. So the attractive part of Genco was that it had sailed directly with those winds into the market leadership in the reverse-logistics space, and with the substantial market presence that we have – particularly with FedEx Ground and FedEx SmartPost in that sector – it was just a natural fit,”
- Regarding Bongo International, T. Michael Glenn, FedEx Corporation Executive Vice President, Market Development and Corporate Communications, said: “We anticipate global e-commerce to continue on a double digit growth trajectory. Bongo International’s end-to-end cross-border enablement capabilities will greatly enhance the FedEx portfolio of global e-commerce solutions and provide customers with unmatched flexibility to establish and expand their international business and customer base.” That customer base, according to FedEx, includes over 2,000 retailers across Europe, the UK and U.S.