FedEx (FDX.US) Expands Riyadh Operations, Increases Bet on Saudi Arabia's "Logistics Ambitions"

According to Jinse Finance, 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 held in Saudi Arabia this week that the operational plan includes 24 monthly cargo flights departing from King Khalid International Airport in Riyadh, making the capital a central node connecting Europe, Asia, and the Americas.

This move marks FedEx's transformation into an independent operator in Saudi Arabia, having previously partnered 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 the main city centers in Saudi Arabia.

This expansion plan comes as Saudi Arabia seeks to attract multinational companies and challenge the UAE's position 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 said that in light of Washington's decision to cancel the so-called "de minimis exemption" policy, FedEx is working with Middle Eastern exporters to address compliance issues and cost impacts.

Viswanathan stated: "Goods that previously enjoyed duty-free treatment now also need to pay taxes. Our responsibility is to ensure that goods can still flow smoothly under the changes in tariff policies."