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FedEx and Microsoft Form A New Partnership

By Lee Samaha – May 18, 2020 at 11:34AM

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The partnership has already produced a solution aimed at helping companies improve their supply chain efficiency.

FedEx (FDX -0.99%) and Microsoft (MSFT -2.26%) announced an exciting multiyear collaboration which is set help businesses become more efficient. and deal with one of the most pressing issues created by the COVID-19 pandemic -- how to manage their supply chains.

The first product of the collaboration will be FedEx Surround. In a nutshell, FedEx Surround will marry data from the transportation company's extensive logistical network with Microsoft's Azure cloud and data analytics solutions.

Trucks outside a distribution warehouse.

FedEx Surround will help companies manage their supply chains. Image source: Getty Images.

As such, a business will be able to "enhance visibility into its supply chain by leveraging data to provide near-real-time analytics into shipment tracking, which will drive more precise logistics and inventory management." according to the press release

It's a good move from FedEx, adding to the buy thesis for the company.

FedEx Surround 

FedEx Surround will enable businesses to react more effectively to supply chain difficulties.

The COVID-19 pandemic has left a host of companies struggling to deal with supply chain issues, first from suppliers in China, and then around the world as the pandemic spread.

Improving supply chain efficiency is also a big deal for businesses that are increasingly relying on time-sensitive deliveries.All told, the world is moving toward ever more time-sensitive deliveries, and the COVID-19 pandemic has highlighted the necessity of reacting to supply chain disruptions. As such, the FedEx/Microsoft partnership, starting with FedEx Surround, comes at exactly the right time.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Lee Samaha has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends FedEx and Microsoft and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. The Motley Fool has a disclosure policy.

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Stocks Mentioned

FedEx Corporation Stock Quote
FedEx Corporation
FDX
$148.50 (-0.99%) $-1.49
Microsoft Corporation Stock Quote
Microsoft Corporation
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