FedEx Breaks Away from Partners–Goes All-In on Saudi Arabia’s Logistics Power Play

This article first appeared on GuruFocus.

FedEx (NYSE:FDX) just made a bold pivot in the Gulf. The global freight giant has opened a regional office in Riyadh and secured a rare Saudi economic license to operate as a foreign air carriereffectively going solo in a market where it had long relied on local partnerships. The new hub will run operations across Saudi Arabia, Bahrain, and Kuwait, and is launching 24 monthly cargo flights through King Khalid International Airport. FedEx’s regional chief Kami Viswanathan described Riyadh as a key link in the global chain connecting Asia, Europe, and the Americasand hinted at further expansion into second-tier cities as demand deepens.

Timing is no coincidence. Saudi Arabia is racing to turn itself into the Gulf’s next logistics heavyweight, angling to outmaneuver the UAE’s long-held dominance. With state-led investment pouring into ports, highways, and rail, the kingdom wants transport to make up 10% of GDP by 2030, up from just 6% in 2021. Viswanathan wouldn’t reveal financial specifics ahead of earnings but confirmed FedEx is leaning in. The move positions FedEx to ride the kingdom’s economic transformation while building a more resilient and localized supply chain backbone in the region.

There’s also a regulatory curveball in play. As the US tightens tariff exemptionsending the so-called de minimis ruleFedEx is working with Middle Eastern exporters to avoid surprise costs. There will be duties payable on shipments that were earlier exempt, Viswanathan said, underscoring the firm’s role in smoothing friction for global clients. While she stopped short of forecasting margin impact, the strategic bet is clear: FedEx is repositioning itself not just as a delivery company, but as a logistics enabler embedded inside the region’s geopolitical and trade rewiring.