FedEx teams up with Microsoft to tackle Amazon and Flexport threats

China 2905 Corp - Forwarders 326 Mode - Containerized 1426 Mode - Seaborne 1762 U.S. 5211

Freight forwarder FedEx has announced a venture with Microsoft to jointly offer data analytics to customers using Microsoft’s Azure and Dynamics 365 platform. The first product, FedEx Surround, will provide real-time tracking and alerts as part of inventory management systems. As discussed in Panjiva’s 2020 Outlook, the logistics sector faces the risk of disruption from technology-based solutions providers as well as the opportunity to improve their own efficiency and offer new services to customers.

The combination of FedEx and Microsoft is notable in that both compete with Amazon which has both web services and its own logistics business. The latter is focused on suppliers using Amazon’s e-commerce services, though with the expansion in non-store retail sales versus stores recently there is nonetheless a threat to FedEx from Amazon.

Panjiva’s data shows that FedEx’s U.S. seaborne imports of containerized increased by 1.9% year over year in April after declining by 16.3% in Q1. By contrast Amazon’s continued to surge from a low base with a 59.7% jump compared to a year earlier. 

On a sequential basis however, Amazon’s forwarding business handling in April increased by 5.8% versus Q1 while FedEx’s increased by 11.6%, partly reflecting the former’s higher exposure to China.


Chart compares U.S. seaborne imports by freight forwarder on a monthly and three-month average basis. Source: Panjiva

FedEx’s new deal with Microsoft may also help it compete more effectively with Flexport, which offers technology oriented freight forwarding solutions. Flexport has been diversifying its base of customers. In 2018 China represented 75.2% of U.S. seaborne imports linked to Flexport while in 2019 that had fallen to 62.8% before declining to 47.8% in Q1. 

Shipments from Asia ex-China have climbed from 13.7% in 2018 to 27.3% in 2019 and 39.0% in Q1. Shipments from Europe have also grown to a record, though have not expanded significantly as a proportion of the total. Flexport’s performance in April has been similar to FedEx’s on a sequential basis with an 11.3% rise in April versus the Q1 average.


Chart segments U.S. seaborne imports handled by Flexport by port of lading region. Source: Panjiva

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