Consultant Insight: FedEx adds Nigeria to its expanding African route

FedEx Express has established a direct commercial presence in Nigeria as the country looks to lower its logistics costs and expand international trade. “Nigeria is on the right path for further growth, and FedEx is committed to supporting this growth and connecting Nigeria to some of the biggest trading partners located in Asia and Europe,” Taarek Hinedi, vice president for FedEx Middle East and Africa operations, said in a Dec. 7 release. “The FedEx network is crucial to provide businesses with greater connectivity between Africa and Europe as well as within the Asia Pacific, Middle East and Africa region.” Nigerian courier Red Star Express PLC will continue to provide ground operations for FedEx Express as it has done since 1994. [caption id="attachment_68221" align="alignright" width="408"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Red Star offers international and domestic express delivery, freight forwarding, integrated logistics solutions, information and document management solutions, warehousing, packaging services, food delivery, agriculture logistics and e-commerce solutions, according to its website. For the year ended March 31, Red Star reported 12.6 billion naira (US $28 million) in turnover, up 33% year over year. The courier benefitted from strong e-commerce demand. The Nigerian market was estimated at $6.9 billion in 2021, placing the country as the 33rd-largest e-commerce market in the world, according to Red Star’s most recent annual report. Furthermore, Red Star noted that “the country’s population is enormous and growing, and it is expected to be the world’s third-largest by 2050.” Increasing exports As Nigeria continues with its 2021 to 2025 National Development Plan, which aims to increase the share of its exports to Africa to 35% from 20%, businesses will require a range of international services and solutions to help boost the economy, Hinedi said. Murtala Muhammed International Airport (LOS) in Lagos is the busiest airport in Nigeria, and hosts around 30 cargo and commercial airlines, including FedEx Express. In 2021, the airport was ranked 5th in volume among Africa’s air cargo airports with 204,659 tonnes, according to the Airport Council International. However, Nigeria’s overall air trade is lopsided with most being imports — 89% in 2020 and 87% in 2021. Much of the problem can be attributed to lack of standards and adhering to international requirements. For example, the U.S. has banned the export of smoked catfish and other fish products from Nigeria over lack of adequate documentation. The Shippers Association of Lagos estimates that seized or prohibited items make up 82% of Nigeria’s exportable agro-allied produce. Nigeria and other developing countries are expected to lose between $12 billion and $15 billion by 2025 to rejected exports, according to the World Bank. FedEx Express expansion into Africa Earlier this year, FedEx Express introduced regular flights to Kenya. The route originates in Memphis (MEM), onto Dubai (DXB), Johannesburg (JNB) and Nairobi (NBO), before connecting into the FedEx Express Middle East, Indian Subcontinent and Africa (MEISA) air hub in DXB, onto Milan (MXP) and then back to Memphis. “We see enormous potential in the African continent, and we are delighted to help unlock growth opportunities for East and Central Africa businesses, boosting opportunities for trade and business expansion,” said Jack Muhs, senior vice president at FedEx Express. Indeed, FedEx Express is diversifying its trade lanes to lessen its dependence on the trans-Pacific, trans-Atlantic and U.S. domestic to mitigate potential risks, as well as to grow its global market share.

Consultant Insight: FedEx adds Nigeria to its expanding African route

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