FedEx and Microsoft Team to Optimize Package Delivery

FedEx may be placing a cap on shipments from major retailers due to overwhelming demand, but the carrier is still making moves. On Monday, FedEx and Microsoft announced a joint partnership to integrate FedEx’s logistics network with Microsoft’s Azure. In the announcement, the two companies said this multi-year partnership could “transform commerce,” and they’re calling this first service FedEx Surround.

The FedEx and Microsoft Partnership Marks a Growing Trend for Shipping Carriers to Embrace Cloud Technology

The two companies didn’t provide details into how FedEx Surround will give real-time analytics into supply chain and delivery. However, the bottom line for the partnership is that companies will be able to ship goods more efficiently through FedEx.

FedEx Surround will be made available later in the year, and will collect data through FedEx’s IoT technology and analyze it through Microsoft Azure’s suite of services. With access to this data analysis, FedEx Surround could help predict issues that would slow delivery times, such as like clearance problems or severe weather in certain areas. As a result, this would allow companies to change routes in order to deliver packages to consumers more quickly.

FedEx Continues to Move Further Away from Amazon (and Other Carriers Might, Too)

Financially speaking, the shipping community expects FedEx to benefit greatly from utilizing cloud data to optimize its network. On Monday, announcement of this joint venture sent both FedEx and Microsoft’s stock prices trending upwards for the day. However, this partnership between the two companies is just as symbolic as it is strategic on FedEx’s part.

Noticeably, the creation of FedEx Surround purposefully excludes one key player in the cloud technology space: Amazon. There are two companies that provide leading cloud services: Amazon with Amazon Web Services (AWS), and Microsoft with Azure. At the end of the day, FedEx partnering with Microsoft is yet another display to break further away from Amazon.

As Amazon builds out its own logistics network, FedEx has responded by cutting as many ties with them as possible. A few months ago, FedEx announced it would stop providing express delivery for Amazon. Shortly afterward, FedEx pulled its ground services from Amazon, too.

If FedEx’s recent moves are any indication, then it may not be much longer until other major carriers like UPS and the US Postal Service begin to break away from Amazon, as well.