TNT Deal Raises FedEx Employment to Almost 400,000
The jewel of FedEx's acquisition of TNT Express last week is a European road network linking 40 countries, but the heart of FedEx remains in Memphis, Tennessee.
No immediate impact was foreseen on FedEx's Memphis area workforce of more than 30,000, but the company's continued growth as a force in world commerce would have a ripple effect. FedEx is the that area's largest private employer.
TNT and FedEx, the Nos. 3 and 4 players in the $60 billion European express delivery market, on May 25 consummated a $4.9 billion deal that had been brewing since early 2015.
MORE ON FEDEX: Begins integrating TNT (TT login req'd)
The combination promises to make FedEx a bigger player in Europe by building on TNT's road network and improving international connections. FedEx ranks No. 2 on the Transport Topics list of the 50 largest global freight carriers; TNT had been No. 22. UPS is No. 1.
FedEx also moved into a virtual dead heat with chief U.S. rival UPS in total revenues, although it still trails the Atlanta-based company's workforce of 444,000. A decade ago, FedEx had two-thirds of UPS' annual revenues.
FedEx chief spokesman Patrick Fitzgerald discussed the integration, which is expected to take four years, and potential impact in Memphis. He acknowledged that in the short term, "I wouldn't have anything to point to tangibly that people would see."
FedEx is moving European headquarters from Brussels, Belgium, into TNT's home base in Hoofddorp, The Netherlands. FedEx Express is adding TNT's airfreight hub in Liege, Belgium, to principal European hubs Paris-Charles De Gaulle and Cologne, Germany.
FedEx's pattern in the past has been to leave newly acquired companies' headquarters where they are. FedEx Ground, which grew out of a 1998 purchase of Caliber System/Roadway Package Service, is based in Moon Township outside Pittsburgh. FedEx Office, rooted in the acquisition of Kinko's in 2004, moved into a new world headquarters in Plano, Texas, last year.
FedEx declined to break down employee numbers in the Memphis area, including the FedEx Express World Headquarters on Hacks Cross, the hub at Memphis International Airport and FedEx World Technology Center in Collierville.
Memphis airport officials have pegged hub employment at "more than 11,000," and a 2015 FedEx report to Collierville said the tech center employed 2,709. FedEx Ground and FedEx Freight have service centers and sorting facilities.
Fitzgerald is senior vice president of integrated marketing and communications. His responses have been edited for brevity.
Commercial Appeal: Will a growing market share in Europe and other countries served by TNT feed more volume into the hub?
Fitzgerald: There's significant potential for growth, which would affect all of our operations, and obviously the hub here in Memphis is at the heart of FedEx Express and FedEx Express operations. It should be very positive for all our employees.
CA: Will this acquisition have an impact on the big operations that are already here, the hub, world headquarters?
Fitzgerald: Our team members will certainly be aware of being on a larger team. We're moving to approximately 400,000 team members around the world. It's just the latest step in the evolution and growth of FedEx. We're a growing, successful organization that continues to be very proud to be headquartered here in Memphis.
Just in terms of our success as a company and a growth engine or driving engine is the growth of e-commerce, which I think everybody feels in just day-to-day retail and business patterns. We play a key role in that, and the acquisition of TNT will help us continue to grow that. You may notice some things that way.
CA: How quickly will FedEx move to rebrand the combined operation?
Fitzgerald: The TNT brand is very strong, so it's really something that we want to make sure we pursue in the most effective course for the brand and not lose any of the strength of either brand. The combined brand together will be stronger, but specific considerations, the vehicles and aircraft, country by country, that's all going to be part of the integration process. It's not to say we in any way want to diminish the strength of the TNT brand.
We've done some significant acquisitions in the past and that includes Flying Tigers and RPS, FedEx Ground, Kinko's and FedEx Office. We do have some experience in this and each one's a bit different. In this case, because this is such a large international integration, we do have to consider country by country, so it may vary by territory in terms of brand transitions.
