FedEx Strengthens Middle East Presence With Regional Hub In Riyadh: Report

FedEx (FDX) has reportedly launched a new regional hub in Riyadh and secured a Saudi economic license to operate as a foreign air carrier, as the logistics and transportation giant bolsters its presence in the Middle East.

According to a report by Bloomberg News, citing company executives, the parcel delivery firm will operate 24 cargo flights per month through King Khalid International Airport in Riyadh, establishing the capital as a central node linking Europe, Asia, and the Americas.

The report states that this will mark the beginning of FedEx’s journey as an independent operator, as it had previously partnered with local players in the kingdom. It further mentioned that while a FedEx executive was reluctant to give out financial details ahead of its earnings, it would expand further in the country beyond major urban centers, backed by robust demand.

Retail sentiment on Stocktwits about FedEx was in the ‘bullish’ territory at the time of writing.

FedEx’s Saudi expansion underscores the importance of the Middle East as a crucial transit point for logistics firms. In June, Germany’s DHL Group had said that it plans to invest more than 500 million euros in the Middle East, with a focus on Saudi Arabia and the United Arab Emirates.

Riyadh is attempting to reduce its dependence on oil and challenge the UAE's dominance as the key hub for industries and logistics firms. The Saudi government plans to boost the transport sector’s contribution to gross domestic product (GDP) to 10% by 2030 from 6% in 2021.

FedEx is scheduled to report its fiscal first-quarter earnings on Sept. 18. The company and its peers, such as UPS, have suffered from uncertainty in tariff policy, which has affected demand.

The stock closed at $224.18 on Tuesday, below its 50-day simple moving average of $230.37. FedEx stock has fallen 20.4% this year.

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