Harnessing the power of data to transform FedEx and commerce

A decade from now when we look back at the year 2020, I believe we will see it as a turning point, when business accelerated its embrace of a digital transformation that had long been coming.

At FedEx, like many of the customers we serve, we’ve been on a steady path to transform our business digitally by harnessing the power of our data. The events of 2020 fast-tracked the journey that we had already begun, as customers’ need for speed and predictability has greatly intensified.

As I reflect on our strategy for the future underway at FedEx, three principles have been key to our progress. These principles are applicable to any business in the midst of a transformation.

First, transformation begins and ends with purpose.

At FedEx, our purpose is to connect people with goods, services and ideas to create opportunities and improve lives. We believe that a connected world is a better world, and that purpose guides everything we do. At its core, our transformation is about using data to better connect people with goods, services and ideas—to create more opportunities for our customers and improve lives.

In a world of just-in-time supply chains, global trade and growing e-commerce—coupled with the uncertainties of COVID-19—speed, flexibility and knowledge now mean everything. With the power of data science and machine learning, we are generating more insights to help unlock greater visibility into a shipment’s journey. These insights help inform decision-making for, and with, our customers.

Consider that we transport more than 16 million shipments per day, and each shipment undergoes between 20 and 30 scans in a single journey. That translates to a massive amount of supply chain data, that in turn can provide enormous value to our customers. Our analysis of data about shipments collected over time is helping us identify new patterns and pain points to make our network even more reliable than before.

And with new technologies, we’re taking it a step further, enabling the data, from various sources, to seamlessly interact to solve problems our customers didn’t even know they had. For example, if a shipment of lifesaving drugs is headed to a hospital in Chicago, but a surprise snowstorm strikes, our sensor technology can alert us of a potential delay and give us the opportunity to intervene and potentially circumvent the delay.

This is just one example of how we are reimagining the way data and technology are used within the global supply chain to deliver stronger performance, strengthen customer relationships and drive greater efficiency. It all goes back to our purpose.

The second principle is collaboration.

A critical part of our transformation has been a focus on pairing our strengths in logistics and supply chain data, with world-class capabilities in AI, machine learning and cloud computing. Through our collaboration with Microsoft, we are doing exactly that. FedEx Surround collects multiple data points through FedEx scanning processes and combines it with external weather data, which may be also coupled with our latest IoT technology. The information is then analyzed using Microsoft Azure and its broad suite of AI, machine learning and analytics solutions to not only track parcels along a journey, but provide customers with near real-time awareness of global commerce conditions. It’s a degree of visibility into the supply chain and a level of agility never possible before, but now uniquely achievable with leading edge data analytics—and more specifically, through our companies’ collaboration.

For instance, going back to that shipment of lifesaving drugs, with FedEx Surround plus our IoT capability, SenseAware, we can track environmental conditions like temperature throughout every step of that drug shipment’s journey, whether it is in a warehouse or exposed to the elements in transit, to intervene and mitigate an issue if it were to arise. Our suite of digital and data solutions are helping protect mission-critical goods, providing not only information about the package but about the environment in which the package travels. This is especially beneficial for the pharmaceutical industry which loses roughly $15 billion a year from products that perish when products are allowed to exceed their temperature range or other extenuating circumstances.

As we think ahead to the shipment of a sensitive COVID-19 vaccine to hospitals, physicians and medical facilities around the world, FedEx near real-time digital transformation, coupled with the largest cargo fleet of airplanes and a dedicated team to support healthcare shipments, positions our network to deliver on the need.

Finally, transformation is not an event, but a journey.

At FedEx, we are a company that’s been transforming from the start. More than 40 years ago, our founder and CEO Fred Smith recognized before anyone else that, “The information about the package is as important as the package itself.” It was groundbreaking when he said it in 1978 and illustrates the role innovation has played in our DNA since day one.

Innovation inspired our start and it is fueling our future. Our digital transformation today is but a chapter in that longer story. As we reach specific goals, and realize launch dates, there’s a temptation to feel that our transformation is complete. But these are just steps in a continuous journey. While the pace of transformation may be faster and more furious today, as long as our purpose remains, we will strive to find ever better ways and means to fulfill it.