Jack Muhs, the new president and CEO of FedEx Trade Networks (FTN), the freight forwarding division of FedEx Corp., says he is hopeful that the second half of 2014 will be strong for FTN. After a slow start, the first half has been good.
“I came in in February, and it was a little nerve-wracking to start because of weak volume, but we have seen a nice pick up since then. We are cautiously optimistic,” Muhs says. “I am taking the lead from my team that says our numbers, 24 percent year-over-year growth in the air cargo business, are good. So, we are looking much better and we hope to continue that trend. Right now, we feel good about the second half. There are a lot of unknowns. We think the base business is getting firmer, a little more stable, and that’s good news for everyone in the transportation world.”
One of those unknowns is the outcome of contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association. Muhs says his organization is preparing for a variety of outcomes.
“We have been watching the developments with the ILWU negotiations,” Muhs (pictured right) says. “Obviously, what’s in the best interest for everyone involved is a resolution, but we have to be prepared for all eventualities, so we are taking preparations, working with customers and looking at what we can do to provide incremental air capacity should they need it.”
Muhs, who began his career with FedEx in 1984, has served in a variety of operations and executive roles. Before joining FTN, he was most recently senior vice president of U.S. international, global planning, engineering and trade services at FedEx Express, where he was responsible for the company’s U.S. export business, as well as the planning and engineering of the FedEx Express global network.
Muhs says his primary strategy at FTN is to leverage the entire range of FedEx services.
“Customers more and more are looking for an entire suite of services,” Muh says. “Being involved with an integrator, we can bring more solutions to bear on many sorts of challenges that come up.”
Muh’s believes e-commerce has potential to give air cargo a significant boost in the coming years. He says FedEx is working with some e-commerce providers to carry out distribution in the U.S.
“Alibaba, a huge [company] in China, recently put out an IPO in the U.S. It would appear that their intent is to get more involved in the U.S. market. There is also going to be a number of e-commerce providers that no one knows about yet because their products are going to come in the future.”
Muhs says FTN has seen its strongest international growth in Asia, followed by Europe.
“We have also seen nice growth in Latin America, which is still a small market. But we have a lot of distribution services in Brazil and Mexico, especially. We can facilitate movement of goods, and we will take advantage of those opportunities,” he says. “But Asia is the biggest, and the U.S. is still a robust market for us.”