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The companies will provide commercial shipping customers with early warnings of potential delays because of weather, traffic and other occurrences, according to a the companies. The service would use Microsoft’s Azure cloud software to give companies real-time data about their goods.
“FedEx has been reimagining the supply chain since our first day of operation, and we are taking it to a new level with today’s announcement,” Frederick W. Smith, chairman and CEO at FedEx, said in a statement sent to FOX Business. “Together with Microsoft, we will combine the immense power of technology with the vast scale of our infrastructure to help revolutionize commerce and create a network for what’s next for our customers.”
The initiative, FedEx Surround, will not cost customers extra and it is planned to roll out after a pilot test this the summer. It marks the first partnership between the two companies but could lead to future collaborations to help the courier position itself as a logistics competitor to Amazon.
“Now more than ever, organizations are counting on an efficient and capable supply chain to remain competitive and open for business,” Microsoft CEO Satya Nadella, said in the statement. “Together with FedEx, we will apply the power of Azure, Dynamics 365 and their AI capabilities to this urgent need, building new commerce experiences that transform logistics for our mutual customers around the world.”
FedEx’s shares have dropped 3 percent in the last month and are down 29 percent on the year. It is expected to release its fourth-quarter fiscal year 2020 results after the market close June 30.
Microsoft shares ticked up 5 percent in the past month are up 46 percent on the year.
The move comes after FedEx said it would limit the number of items that roughly two dozen retailers, including Kohl's, can ship from certain locations, as the delivery company tries to prevent its network from being overwhelmed during the coronavirus pandemic.
Many retailers have seen e-commerce sales surge since they were ordered to close thousands of their stores, a shift that has unleashed a flood of packages into FedEx's delivery network. They have converted stores into makeshift warehouses to help fulfill more of the orders, scrambling the normal flow of online shipments from distribution centers to homes.