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FedEx Spreads e-Commerce Wings with P2P Mailing Acquisition

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FedEx’s acquisition

On March 27, 2018, Memphis-headquartered global logistics giant FedEx announced the acquisition of P2P Mailing for ~$130 million (or 92.0 million pounds). The UK-based transportation company provides international parcel delivery worldwide.

P2P has partnership agreements with final-mile delivery partners across the world. The company’s innovative IT platform allows customers to communicate with the platform in their local language. The company offers customers unique last-mile delivery options via its network with private, postal, retail, and clearance providers in over 200 countries.

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FedEx’s plans for P2P

P2P Mailing will operate as a subsidiary of FedEx Cross Border within its newly created FedEx Trade Networks operating company. With the acquisition, FedEx expects to cater to more areas in the e-commerce market with niche services. On March 1, 2018, FedEx realigned its specialty logistics and e-commerce solutions in a new organizational structure under FedEx Trade Networks in the Express segment. The realignment is expected to boost FedEx’s ability to deliver the capabilities of its specialty companies to customers.

On the acquisition, Carl Asmus, president and CEO of FedEx Cross Border, commented, “Global e-commerce continues to grow at a rapid pace, and more and more merchants, marketplaces, e-commerce and social platforms are looking for innovative, cost-effective ways to get merchandise from distribution points in one country to customers in another. By adding P2P to the FedEx portfolio, we will be able to effectively serve even more elements of the e-commerce market.”

ETF investment

95 ETFs have exposure to FedEx. Among the ETFs covering the company, the iShares Transportation Average ETF (IYT) has the highest exposure to FDX stock. The stock forms 15.1% of IYT’s portfolio. US airline (DAL) companies, railroads (UNP), and transportation (JBHT) companies, respectively, make up 46.4%, 26.3%, and 11.9% of IYT’s portfolio holding.

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