FedEx expands its business in Riyadh, increasing its bet on Saudi Arabia's "logistics ambitions."
FedEx has established a new regional hub in Riyadh and obtained a foreign airline operating license from the Saudi government, indicating its confidence in the Saudi logistics market. The company plans to initiate 24 cargo flights per month from King Khalid International Airport in Riyadh, aiming to transform Saudi Arabia into a logistics center connecting Europe, Asia, and America. In addition, FedEx also plans to expand its operations beyond major cities in Saudi Arabia to meet the growing demand
According to Zhitong Finance APP, FedEx (FDX.US) has established a new regional hub in Riyadh and obtained a foreign airline operating license issued by the Saudi government. This move indicates that the company is increasing its bet on Saudi Arabia becoming a logistics powerhouse in the Middle East.
FedEx representatives stated at an event in Saudi Arabia this week that the operational plan includes 24 cargo flights per month departing from King Khalid International Airport in Riyadh, which will make the capital a central node connecting Europe, Asia, and America.
This initiative marks FedEx's transformation into an independent operator in Saudi Arabia, having previously collaborated with local outlets. The regional president, Kami Viswanathan, declined to disclose financial details before this month's earnings report but stated that due to strong demand, FedEx plans to further expand its business beyond major urban centers in Saudi Arabia.
This expansion plan comes as Saudi Arabia attracts multinational companies to challenge the UAE's status as the industrial and logistics hub of the Gulf region. The Saudi government is investing in the development of ports, railways, and highways, aiming to increase the transportation sector's contribution to GDP from 6% in 2021 to 10% by 2030.
Viswanathan also discussed the impact of changes in U.S. tariff policies on global shipping. She stated that in light of Washington's decision to eliminate the so-called "minimum exemption" policy, FedEx is working with Middle Eastern exporters to address compliance issues and cost impacts.
Viswanathan said, "Goods that previously enjoyed tax exemptions now also need to be taxed. Our responsibility is to ensure that goods continue to flow smoothly despite changes in tariffs."
