FedEx Eyes Stake In Germany’s Hermes Delivery Service

With home deliveries surging, FedEx may be looking to acquire stake in German delivery firm Hermes, according to the Handelsblatt newspaper, as reported by Reuters.

FedEx has very limited presence in Europe’s delivery circuit, and Petra Scharner-Wolff, finance chief of Hermes, said the company’s efforts to find a strategic partner for parcel delivery had sparked “broad interest,” according to Reuters.

FedEx has been seeing an upheaval of its business and may have to tap into debt to make up for the dearth of the usual high-profit business shipments. The Memphis-based delivery company has instead seen a massive upswing in low-margin personal home deliveries as people start to shift to eCommerce during the pandemic.

FedEx acquired TNT Express in 2016 for boosting its B2B shipments, and Last Mile Experts Managing Partner Marek Różycki said there could be some risk in acquiring stake in Hermes due to the lack of success in integrating TNT Express into its business practices. Last Mile Experts is a European delivery consultancy.

In Europe, Hermes has been seeing a soaring growth in delivery needs, which the company compared to how a normal year’s Christmas rush would be, according to owner Otto, an eCommerce group.

Hermes is coming off of a bad 2019 when it had double-digit losses, according to Reuters, citing Handelsblatt.

FedEx has felt the pressure of the pandemic as online sales increased almost 50 percent during the month of April.

FedEx issued notices to some retailers, including Kohl’s, DSW, Nordstrom, Neiman Marcus, Hobby Lobby, Eddie Bauer and Bed Bath & Beyond, limiting the number of items they can ship as the pandemic began to drive up demand to levels FedEx couldn’t handle.

The firm said it had begun to impose rules similar to requirements it has during the holidays, including delivering more on Sundays, hiring more people for some markets and working with shippers to control capacity.