Consultant Insight: UPS, FedEx take greater stake in India

[caption id="attachment_76185" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo Next columnist[/caption] UPS and FedEx plan to take a deeper stake in India as the country becomes a beneficiary of supplier diversification plans by retailers and manufacturers looking to decrease their dependence on China. Recently, both UPS and FedEx announced they are investing to recruit and train employees. UPS, for example, plans to invest $15 million to $20 million to set up a technology center in India. The facility, expected to open in August, will focus on operational and interface technologies for finance, human resources and legal divisions. UPS hopes to hire up to 1,000 employees and be fully staffed by 2025. FedEx, meanwhile, plans to open its first Advanced Capability Community (ACC) in Hyderabad, India. FedEx’s planned ACCs are designed to “recruit, strengthen and develop the company’s diverse workforce all around the world and build a more efficient and agile organization to enhance how we deliver for our customers,” according to a press release. The company also plans to set up ACCs in other parts of the world in the future, with locations selected based on business needs and access to skilled talent pools. The communities will be staffed by full-time FedEx team members who will provide shared services to support the technological and digital requirements of the entire FedEx enterprise. India is expected to surpass China as the most populated country in the world this year. Still, recently published reports have raised questions about whether India will have enough jobs for its eligible working population. A prime location Still, as geopolitical threats increase and the need to diversify suppliers grows, India is becoming an optimal location for doing business. Apple , for example, shifted some of its iPhone 14 production to India last year. Currently, 5% to7% of Apple’s manufacturing is in India. According to JP Morgan , Apple could be making 25% of all its iPhones in India by 2025. UPS and FedEx have also expanded services in India. Some of their recent expansions include: In 2022, UPS and InterGlobe Enterprises , a travel and hospitality conglomerate based in India, established a joint venture to launch MOVIN . MOVINwill build technology-backed solutions to link companies across the country to international businesses and offer integration across air and ground networks to B2B customers. Also in 2022, UPS opened a second airport cargo-handling facility in India. The 15,000-square-foot space in Bengaluru’s international airport will connect south India’s automotive, textile, defense and aerospace manufacturing hubs to parts of Asia, Europe and the United States. In mid-2021, FedEx announced a collaboration with Delhivery . As part of the collaboration, FedEx Express made a $100 million equity investment in the India-based logistics and supply chain services company. The two companies entered into a long-term commercial agreement in which FedEx Express focuses on international export and import services to and from India, and Delhivery sells FedEx Express international products and services in the Indian market and provide pick-up and delivery services across India. FedEx also agreed to transfer certain assets pertaining to its domestic business in India to Delhivery. Regarding the Delhivery partnership and growth in the country, Don Colleran, who served as FedEx Express President and Chief Executive before retiring in late 2022, said, “India is a strategic priority for FedEx. We are excited about our long-term vision to grow our business in India and our continued role in serving customers seeking to expand in or enter the Indian market.”

Consultant Insight: UPS, FedEx take greater stake in India

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