FedEx Moves to Sell Supply Chain Unit to Continue Corporate Streamlining

FedEx plans to sell FedEx Supply Chain to CMA CGM Group, a Marseille-based global provider of sea, land, air and logistics solutions, at an enterprise value of $1.4 billion.

The acquisition is expected to close by the end of the year, subject to customary regulatory approvals, the companies said in a Wednesday (July 1) press release.

FedEx Supply Chain provides warehousing, distribution, fulfillment, returns, recycling and transportation management services, according to a company structure page on FedEx’s website.

Upon the closing of the acquisition, CMA CGM subsidiary CEVA Logistics would see its North American contract logistics operations nearly triple in size. After integrating FedEx Supply Chain’s assets and nearly 10,000 team members, CEVA Logistics would operate about 150 warehouses and have 20,000 employees in North America, according to the release.

In addition, following the execution of the transaction, CMA CGM and FedEx expect to enter into multiyear commercial agreements in which CMA CGM will become a preferred ocean carrier for FedEx and the companies will work together on air cargo capacity solutions. These agreements are expected to begin between now and 2028, per the release.

CMA CGM Group Chairman and CEO Rodolphe Saadé said in the release that the acquisition and partnership will expand CEVA Logistics’ activities in North America and strengthen the company’s ability to provide integrated supply chain solutions.

“These deals also reinforce our long-term commitment to investing in the United States and supporting the resilience and efficiency of its supply chain,” Saadé said.

FedEx President and CEO Raj Subramaniam said in the release that the sale of FedEx Supply Chain enables FedEx to continue sharpening its focus on high-value verticals such as healthcare, automotive, aerospace and data centers.

“By streamlining our portfolio, FedEx is better positioned to execute our long-term vision and continue to serve as the heartbeat of the industrial economy, delivering unmatched connectivity, reliability and value to our customers globally,” Subramaniam said.

When reporting its quarterly earnings on June 23, FedEx said that it finalized the spinoff of its less-than-truckload (LTL) business, FedEx Freight, into a new publicly traded company on June 1. The company said in an earnings presentation that the move positions both companies for success as “focused industry leaders.”