The logistics giant has announced a significant investment in InPost, a European e-commerce focused parcel carrier specializing in out-of-home last-mile delivery. This move is expected to boost FedEx's European performance by allowing it to improve its network utilization and reduce costs. By outsourcing lower density B2C volumes to InPost, FedEx can free up capacity within its system to focus on higher margin B2B volumes that are core to the company's growth strategy.
According to FedEx executives, this deal will enable the company to participate strategically in the rapid growth of out-of-home parcel delivery across key European markets. The acquisition is valued at $9.2 billion and will make InPost a private company. FedEx has agreed to acquire a 37% stake in InPost for approximately $2.6 billion.
InPost operates a network of 61,000 parcel lockers and over 34,000 pick-up/drop-off points across several countries. The company supports more than 100,000 e-commerce sellers and delivers over 1.4 billion parcels annually. This perfecting of the parcel locker model at scale in Europe will enable FedEx to tap into this expertise.
The out-of-home delivery method is gaining popularity among consumers who value the convenience of parcel vending machines. This approach also results in lower carbon emissions and operating costs for couriers. InPost has been rapidly growing its footprint through a series of acquisitions in several European countries.
InPost's rapid growth and high profitability have made it an attractive investment opportunity for FedEx. The company delivered 25% more parcels last year than the previous year, with adjusted operating margins reaching 29%. This growth is expected to continue as InPost expands its network and improves its services.
FedEx CEO Raj Subramaniam stated that investing in InPost will enable the company to improve the efficiency of B2C last-mile operations and enhance returns. The deal complements FedEx's strategy well, allowing it to participate strategically in the growth of out-of-home parcel delivery across Europe.
The relationship between FedEx and InPost will also benefit InPost customers by providing access to FedEx's global air and ground network. This expanded reach will enable InPost to better serve its customers and expand its services.
FedEx has been focusing on premium e-commerce, and this deal will allow the company to profitably participate in B2C shipping without undercutting its strategic priorities. The acquisition is expected to be accretive to earnings within a year.
The deal is subject to shareholder and regulatory approval, with an expected closing date in the second half of the year. FedEx has expressed confidence that this investment will drive growth and improve its European performance.
This deal will enable FedEx to improve its network utilization by outsourcing lower density B2C volumes, freeing capacity to prioritize higher margin B2B volumes.
