FedEx, Microsoft Partner for Real-Time Supply Chain Analysis

Need to Know

• The new partnership will help businesses remain competitive in an increasingly digital-only commerce landscape.
• The first FedEx-Microsoft collaborative offering, FedEx Surround, will offer near-real-time insights on companies’ physical inventory.
• FedEx Surround will be available this summer; more dual offerings expected in the future.

Analysis

On Monday, Microsoft and FedEx announced a partnership aimed at helping retailers and other companies more successfully navigate an increasingly digital commerce landscape.

Speaking to FedEx Chairman and CEO Frederick W. Smith in a video call released on YouTube, Microsoft CEO Satya Nadella said he is “optimistic about the opportunity for our two organizations… to go to our respective customers and really empower them.”

The first joint offering from Microsoft and FedEx, called FedEx Surround, will team Microsoft’s AI tools such as Azure and Dynamics 365 with FedEx’s existing logistics capabilities to provide businesses with near-real-time analytics and data that will help them better monitor their inventory and track supply chains.

“Supply chains today are a product-push environment,” Smith said on the video call. “The sales process, which keeps the enterprise in business, is highly distributed. So there’s a lot of guesswork and extra inventory because of that.”

FedEx Surround will be especially helpful to businesses with time-sensitive deliveries, as the analytics provided to the sender are granular and detailed. Using Microsoft’s suite of AI and machine learning tools, FedEx Surround will give participating businesses access to increased visibility of a package during its journey to the customer or destination, and will also provide insights regarding external challenges and disruptions, such as natural disasters, clearance issues, and incorrect receiver addresses.

The deal positions the two companies to fairly face off against online retail giant Amazon. Smith said the technology is “applicable to anyone that has a product, healthcare, fashion, medicine, sporting goods, whatever it may be.”

More nimble and dynamic tracking and analytics has become an increased priority for shipping companies in recent months. In November, UPS announced a new suite of IoT sensing and monitoring solutions; and just last month, FedEx revealed it would be teaming up with Freightos.com to digitize freight processes and better position itself as a competitor to Amazon.