FedEx & Microsoft Reveal New E-commerce Logistics Solution

FedEx Corporation (NYSE: FDX) and tech giant Microsoft Corporation (NASDAQ: MSFT) have announced a new cross-platform logistics solution for e-commerce. The recent move is part of their multiyear collaboration, announced in May 2020, to transform commerce, supply chains, and logistics. 

The two companies plan to integrate data insights from FedEx with Microsoft’s Dynamics 365 Intelligent Order Management, which will improve customer engagement and provide enhanced shipping options. This, in turn, will enhance merchant competitiveness in the e-commerce sector. Notably, the Microsoft offering uses data and artificial intelligence (AI) for an omnichannel order management application. 

The integrated solution is likely to be accessible to customers in the U.S. in the second half of 2022. 

FedEx, a multinational delivery services company, provides transportation, e-commerce, and business services worldwide. Microsoft, one of the currently trending stocks according to TipRanks, offers an array of software, services, and solutions, as well as devices such as personal computers, tablets, and gaming consoles. 

Background 

The pandemic has increased the adoption of e-commerce and forced the digitization of most businesses. FedEx and Microsoft partnered two years ago to aid businesses with their digital transformation.  

Pre-pandemic, according to FedEx’s projections, the U.S. domestic package market was expected to record 100 million packages per day by 2026. FedEx has now revised its projections to 110 million domestic packages a day by 2022, with e-commerce expected to contribute 86% of that growth.

Initially, FedEx Surround was integrated with Microsoft Azure cloud technology to logistics data in an innovative way. Markedly, deployed in December 2020, FedEx Surround supported the transportation of COVID-19 vaccines and helped manage the monitoring of these priority shipments. 

Official Comments 

FedEx President and COO, Raj Subramaniam, commented, “Nearly two years ago we set out on a mission with Microsoft to transform the commerce ecosystem. In that time, we’ve made significant progress, leveraging Microsoft Azure technology with our FedEx Surround solution, 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 e-commerce experiences for brands, merchants and consumers,” Subramaniam added.  

Wall Street’s Take 

Yesterday, Goldman Sachs analyst Jordan Alliger maintained a Buy rating and a price target of $343 (39.59% upside potential) on FedEx.  

Consensus among analysts is a Strong Buy based on 12 Buys versus 2 Holds. The average FedEx price target of $309.71 implies 26.04% upside potential from current levels. Meanwhile, shares have lost 16.9% over the past six months. 

Website Traffic 

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into FedEx’s performance.  

According to the tool, the FedEx website has recorded year-to-date website growth of 15.74% so far this year.

Furthermore, FedEx saw a 20.8% sequential increase to 87.7 million unique visitors to its website in December.

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