INTERVIEW: Taarek Hinedi, vice president of Middle East & Africa Operations at FedEx Express

AVB gets the inside scoop on the air cargo airline’s operations in the Gulf
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Taarek hinedi, FedEx Express, Logistics, Air cargo
Jessica Samson, ITP Images

The $4.3 trillion global logistics industry is a network of services that supports the physical movement of goods within and across borders. How efficiently goods can move through these systems to their final destinations is a key factor to a country’s opportunities for trade and economic growth.

A well-known connection between logistics and national economic growth is the facilitation of international trade. The global economic environment has seen a significant increase in the volume of goods traded over the last three decades. Additionally, a shift in customer expectations and increase in domestic consumption has increased the demand for newer products in higher volumes, and for them to be supplied faster. E-commerce has also altered the practice, timing, and technology of B2B and B2C markets, affecting everything from transportation patterns to consumer behaviour, compelling a need for improved efficiency in delivery systems, inventory management, and freight forwarding.

Efficient transport and logistics systems play a vital role in strengthening connectivity between various inter-dependent production sectors like agriculture, manufacturing and tourism. In order to reap the benefits of growing global trade, producers depend on reliable logistics systems that can support their international customer base. Complex border procedures, complicated or inefficient customs clearance process, and fragmented transportation infrastructure, can obstruct international trade, raise the cost of doing business in the country, and affect the potential for economic growth. The toll can be particularly heavy for developing countries trying to compete in the global marketplace. Conversely, progressive and efficient customs operations have the potential, not only to increase trade but also significantly affect the competitiveness of a country´s economy.

“Convenient delivery options within e-commerce will remain key to customer satisfaction and the overall online shopping experience. FedEx Delivery Manager demonstrates our efforts to strengthen our last-mile delivery capabilities.”

The continuing growth of world trade is driving many countries to focus on evaluating and improving their logistics performance. The 2018 edition of the World Bank’s report: “Connecting to Compete”, reveals a bold persistent gap between high-income and low-income countries when it comes to logistics performance. High-income countries score, on average, 48% better on logistics than low-income countries, which suggests that better trade connectivity can bring about direct development and deliver real economic and social benefits. Improving logistics performance has therefore become a major policy objective for nations, due to its beneficial impact on the economy. Leading countries owe an important part of their economic health to their role in international supply chains and logistics. 

The logistics infrastructure in the UAE is becoming increasingly important thanks to the country’s position as a transhipment hub for Europe-Asia trade. A government-led emphasis on the need for reliable and cost-effective logistics operations has increased the competitiveness of the logistics sector, and in 2018, the country ranked first in the Arab world and 11th globally on the Logistic Performance Index. With further tight investments in transportation infrastructure and logistics, the Emirates are expecting a stimulation in tourism growth as well as international trade.

A global marketplace will continue to drive countries to participate in, and reap the benefits of international trade. As the world’s largest express delivery company, linking more than 99 percent of the world’s Gross Domestic Product, FedEx connects people and possibilities around the world, connections which allow businesses to prosper, communities to flourish, and people to thrive.

There is a consensus among experts that e-commerce is a fundamental part of retail today, and an essential driving force for holiday retail-sales growth. 

“Flights on the Memphis-Dubai route also transit through Europe, giving businesses greater access to these critical markets, enabling stronger inter-continental trade links with added capacity between the Middle East into the European.”

The potential value of online spending in the Middle East is quickly emerging as one of the highest in the world, owing to a vibrant young population, and one of the highest global per capita internet penetration levels. 

Shopping applications, wish lists, online gift registries, social media, and blogs have all gradually grown over the recent years. By contrast, traditional sources such as circulars, catalogs, direct mail, magazines, television, and radio have all declined over the same period.

According to Alpen Capital’s report on the GCC retail environment, online shopping across the region is expected to grow to $41.5 billion by 2020. 

With this kind of continuing e-commerce growth, together with a seasonal jump in online holiday shopping, it arranged is no surprise that customers in the Middle East place an importance on the timely delivery of packages. 

With opportunities to shop and ship almost any product from around the world, today’s consumers have higher expectations about the speed of delivery of their goods, especially when it comes to last-minute gifts and presents.

In anticipation of the rising demand, the holiday season rings in slightly early for FedEx, whose networks help drive the entire e-commerce value chain.  Thanks to strong consumer confidence, FedEx believes that this holiday season will continue to reflect the growth they have seen over the past years. 

FedEx has geared up for a record number of packages to be shipped through its networks by running expanded operations, based on customer needs.

With more than 450,000 FedEx team members across the globe busy preparing to ensure customers get their gifts on time, the company has taken several measures to prepare for and deliver a successful 2018 holiday season. 

This includes offering customers more options for convenient delivery. For example, the FedEx Mobile App helps customers coordinate their deliveries during the busy holiday season.

Customers can track their surprise package, receive shipment cost estimation, contact customer service and view FedEx locations nearby conveniently from their mobile phones.  Through such tools, FedEx empowers the end customer.

Ongoing investments in network capacity, automation and technology have helped FedEx build flexible and responsive networks.

FedEx networks reach more than 220 countries and territories, linking 99 percent of the world’s GDP.  Customers count on FedEx for a diverse portfolio of transportation, e-commerce, and business services to connect their customers every day.

FedEx Express has launched SMS functionality within the FedEx Delivery Manager application in the UAE, Bahrain, and Kuwait. The enhancement is part of an on-going expansion of the service to 59 countries, covering 80 percent of global GDP.

FedEx Delivery Manager provides recipients with the ability to customize their FedEx Express deliveries, with convenient options such as rescheduling the delivery time or location, an added benefit for small and medium-sized businesses.

The platform will support the e-commerce market in the region. According to a report by BMI research, e-commerce in the Middle East is expected to be worth US $48.6 billion in 2022, up from an estimated US $26.9 billion in 2018.

“Expectations in last mile delivery and returns are only set to increase with the e-commerce landscape growing rapidly and more retailers and small businesses going online,” said Taarek Hinedi, vice president of Middle East & Africa Operations at FedEx Express.

“Convenient delivery options within e-commerce will remain key to customer satisfaction and the overall online shopping experience. FedEx Delivery Manager demonstrates our efforts to strengthen our last-mile delivery capabilities and provide more control and flexibility to our customers,” he added.

Recipients expecting deliveries to their residence will receive a notification by SMS or email from FedEx when their package has shipped. The recipient can choose to change the delivery instructions in a few simple steps via a secured website. FedEx Delivery Manager is free of charge, easy to use, and secure.

Businesses will benefit from greater customer satisfaction, increased loyalty and cost savings through reduced instances of returns. Customers can choose the right delivery option for their shipment at no added cost with up to date notifications every step of the way via SMS or email.

It also allows FedEx Express to minimize delivery attempts to customers who may not be home to receive deliveries.

Amazon may face a setback with its one-day delivery aspirations after FedEx said it was not renewing its contract with Amazon for FedEx Express, the carrier's expedited shipping service that leverages FedEx cargo aircraft.

It isn’t clear when the current FedEx Express contract expires, and it should be noted that FedEx has said the decision doesn't affect its other contracts with Amazon, such as last mile ground delivery.

FedEx says it will "focus on serving the broader e-commerce market," which the company estimates will see daily packages soar from 50 million to 100 million by 2026.

The news comes amid Amazon's ongoing expansion of its own fleet of Amazon Air cargo aircraft, which consists of leased aircraft operated by partners Air Transport Services Group and Atlas Air Worldwide.

Amazon deepened its partnership with ATSG last year, bringing its total fleet to 50 planes. Of that total, 40 aircraft are already in operation, and the remaining 10 are expected to be delivered by December 2020.

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