June 28, 2022

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FedEx, Microsoft extend partnership to offer ‘logistics as a service’

FedEx, Microsoft extend partnership to offer ‘logistics as a service’

Table of Contents

Dive Brief:

  • FedEx and Microsoft are extending their partnership and offering a cross-platform “logistics as a service” solution that will leverage FedEx’s shipping data on a Microsoft platform to help businesses better fulfill, ship and serve customer orders, the companies announced in a joint press release Monday.
  • Data integration between FedEx, Dynamics 365 Intelligent Order Management and shippers’ existing e-commerce platforms aims to help companies optimize fulfillment and provide real-time delivery status and convenient return options to their customers. The service is expected to be available to U.S. customers in the second half of this year, both companies said.
  • This is part of the companies’ multi-year partnership to produce logistics solutions using data and AI in order to make deliveries more efficient. “The next phase of our collaboration will continue to connect the unmatched supply chain insights from the FedEx network with the Microsoft Cloud to improve e-commerce experiences for brands, merchants and consumers,” Raj Subramaniam, president and COO of FedEx, said in a statement.

Dive Insight:

FedEx continues to expand its logistical capabilities in order to help shippers meet the rise in e-commerce demand.

The transport company built its network to handle demand forecasted for 2025. But the sharp rise in package volume filled network capacity “two to three years earlier” than expected, David Lusk, director of the FedEx Global Security Operations Center for FedEx Services, said in April. The U.S. domestic parcel market is set to grow to 110 million packages a day in 2022 – with 86% of that growth expected to come from e-commerce, FedEx said in the press release.

In response, FedEx has made adjustments such as adding more automated facilities to its network and announced its partnership with Microsoft to help shippers have more control over deliveries.

The use and expansion of data, tech, and AI have been at the forefront of many supply chain partnerships over the past few years. Unilever partnered with Maersk to develop and manage the CPG’s control tower to centralize its ocean shipping and air transport. C.H. Robinson also partnered with Microsoft in 2020 to provide inventory visibility for shippers. In addition, UPS launched UPS Premier to track health care shipments using Internet of Things (IoT) sensors.

“More than ever, it’s clear just how critical having a resilient supply chain is for every organization’s success in the modern economy,” said Satya Nadella, Microsoft chairman and CEO in the statement.