FedEx and Microsoft have announced the next stage of their multiyear collaboration to transform commerce, supply chains and logistics.

The two companies will bring together FedEx network intelligence with capabilities from Microsoft Dynamics 365 to introduce a cross-platform logistics-as-a-service for retailers, merchants and brands.

The companies share a vision for reimagining commerce experiences for businesses so they can offer their consumers more integrated ways to shop, and faster, more efficient deliveries. In today’s world of just-in-time supply chains, global trade and accelerated ecommerce growth, speed, flexibility and visibility are critical. Needs and expectations have shifted across every industry.

Together, FedEx and Microsoft are using tools such as artificial intelligence and machine learning to extrapolate insights from the 17 million packages that pass through the FedEx network each day to help brands deliver improved customer experiences.

The companies announced plans to couple data insights from FedEx with Dynamics 365 intelligent order management to help brands access information and capabilities fulfil, ship and service customer orders while integrating with their existing ecommerce platforms.

This cross-platform approach should help brands deliver modern, high-value experiences directly to their customers, including faster, more cost-effective delivery; near real-time delivery status communications; and convenient, frictionless returns with approximately 60,000 drop-off locations and printerless QR codes.

For brands facing increased pressure to build affinity while managing higher order volumes, ensuring cost-effective fulfilment and reducing costly customer service calls, this technology brings opportunities to leverage existing systems of record, optimise fulfilment and deliver on their order promises with increased precision, while benefiting from a more complete view of their customers.

“Nearly two years ago we set out on a mission with Microsoft to transform the commerce ecosystem,” said Raj Subramaniam, president and COO of FedEx. “In that time, we’ve made significant progress, leveraging Microsoft Azure technology with our FedEx Surround, which provides critical support in enabling advanced monitoring of time-sensitive priority shipments. This next phase of our collaboration will continue to connect the unmatched supply chain insights from the FedEx network with the Microsoft Cloud to improve ecommerce experiences for brands, merchants and consumers.”

Dynamics 365 intelligent order management uses data and AI to create an omnichannel order management application that integrates with existing enterprise resource planning (ERP) and customer relationship management (CRM) systems and can leverage an ecosystem of other order source systems such as online ecommerce marketplaces, mobile apps and social commerce alongside traditional ordering channels such as electronic data interchange (EDI) or brick and mortar point-of-sale.

The platform is equipped with prebuilt connectors to the leading tools brands already use for omnichannel order intake, cross-channel order fulfilment and delivery, and rules-based order orchestration actions within a low- or no-code environment that uses AI and machine learning. Coupled with data and visibility into the FedEx network, the companies aim to empower businesses with innovative ways to serve their customers.

“More than ever, it’s clear just how critical having a resilient supply chain is for every organisation’s success in the modern economy,” said Satya Nadella, CEO of Microsoft. “We’re bringing data and insights from the FedEx network together with the Microsoft Cloud, starting with Dynamics 365, to help organisations accelerate their digital transformation across their business operations so they can offer customers more integrated ways to shop, and faster, more efficient deliveries.”

FedEx and Microsoft joined forces in May 2020 to help businesses compete in an increasingly digital commerce ecosystem. The pandemic has accelerated ecommerce adoption and the digital transformations of businesses of all sizes.

Pre-pandemic, FedEx projected that the US domestic package market would hit 100 million packages per day by 2026. The market is now expected to hit this mark four years sooner than expected, growing to 110 million packages a day in 2022, with 86% of that growth expected to come from ecommerce.

FedEx Surround, the first FedEx customer-facing offering built using Microsoft Azure cloud technology, is a testament to the collaboration’s potential and impact on how data are used in logistics. Built to leverage the millions of data points across the FedEx network, the Surround platform leverages AI, machine learning and analytics to monitor proactively the risk to FedEx packages along a delivery route, such as weather disruptions or traffic delays. This near real-time information provides users with visibility to the state of their supply chain and allows them to plan proactively remediation and alternatives that FedEx can help execute to keep a shipment on track.

Surround was deployed in December 2020 and has been instrumental in supporting Covid-19 vaccine transportation. The platform enabled FedEx to manage monitoring this increase in priority shipment volume.

Seamless FedEx data integration with Dynamics 365 intelligent order management is expected to be available to users in the USA in the second half of 2022.