French shipping giant CMA CGM will buy FedEx’s third-party logistics business as part of its commitment to invest US$20bn in the US market over four years and diversify its business.
The US$1.4bn deal is expected to close this year and will give the company 150 warehouses and 20,000 employees in the US contract logistics sector, the company said in a statement. It will make CMA CGM one of the five biggest warehouse operators in the US.
According to Reuters, between now and 2028 CMA CGM and FedEx are also planning to develop partnerships for the French company to become a preferred ocean carrier for FedEx as part of a non-exclusive agreement. The two businesses are also planning an air cargo collaboration.
As a result of its diversification strategy, CMA CGM has expanded into areas including logistics, port terminals and non-transport activities, to offset volatility in ocean shipping. The new partnerships could represent nearly $3.5bn of revenue over 10 years.