FedEx Corp. (NYSE:FDX) turns 50 in 2021, and the anniversary year promises to be one of its most pivotal in decades.
Aside from the daily skirmishes with ancient archrival UPS Inc. (NYSE:UPS), FedEx is gearing up for an all-out war with former customer Amazon.com Inc. (NASDAQ:AMZN) over the fulfillment and delivery of hundreds of millions of parcels that don’t flow through the e-tail giant’s network. Amazon plans to expand into third-party deliveries in 2021 after the COVID-19 pandemic delayed the initiative by a year.
Crossing swords with Amazon, not to mention slugging it out with UPS, is likely to define FedEx’s next 50 years. It also requires that FedEx step up its e-commerce game and raise its already-formidable IT capabilities to unprecedented levels.
E-commerce customers will demand to receive deliveries exactly when and where they want them. For example, it will be commonplace for a consumer sitting on a park bench to order an item and receive it within the hour at that location. Fulfilling the “park bench” transaction will require delivery agility and precision never seen before. Amazon and UPS have made it clear that parcel precision will be the name of their games in 2021 and beyond.
To its credit, FedEx did anything but stand pat in 2020. For that, the Memphis, Tennessee-based company landed at No. 24 on the FreightTech 25 for 2021.
In May, FedEx and IT giant Microsoft Corp. (Nasdaq: MSFT) launched FedEx Surround, the first project of a multiyear alliance between the two firms. The program is designed to provide deep, near-real-time detail of each step in a package’s journey by combining FedEx’s visibility technology with Microsoft’s suite of artificial intelligence, machine learning and predictive analytics capabilities. The plan is to enable FedEx customers “the opportunity to intervene early and act to avoid logistical slowdowns” before they occur, the companies said at the time.
In September, FedEx unveiled a Bluetooth-enabled tracking device called SenseAware ID capable of transmitting package location data every two seconds via Bluetooth Low Energy (BLE) to WiFi access points or gateway devices across the FedEx Express network. FedEx Express is the parent’s air express and international business unit.
Packages equipped with the devices are tracked hundreds of times during their journey, FedEx said. The technology was rolled out just ahead of the planned delivery of COVID-19 vaccines, and will be instrumental in ensuring the shipments are delivered to their intended destinations and kept intact at proper temperatures, FedEx said. Use of the technology will be expanded during the first half of 2021 to FedEx Express customers.
To support the technology, FedEx created FedEx Dataworks, which will serve as the marketing and customer-facing focus of its ramped-up e-commerce efforts.
