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FedEx Works To Monetize Their Big Data Posted on : Jan 22 - 2022

A network effects business model allows a company to gain more value as more companies use its products or services. The value of the offering rapidly increases because each additional user increases the value of the network. Today, we mainly think of digital companies like Google GOOG -2.6% and Twitter in this category. Google and Twitter mainly monetize the data through targeted advertising. The value of the data captured by Google and Twitter has made them the darlings of Wall Street.

But it turns out big logistics firms also generate Big Data, and they are also working to monetize this data. A case in point is FedEx FDX -2.3% (NYSE: FDX). FedEx Dataworks is an organization within FedEx that uses data science and machine learning to help make shipping more efficient. The richness of FedEx’s data comes from the 17 million packages they ship per day around the globe. Each shipment is scanned many times as it moves from origin to destination.

Sriram Krishnasamy, the CEO of FedEx Dataworks, said that the data is much richer than just scan data. FedEx enriches this data with weather and traffic data. FedEx is doing the obvious thing with that data; they are using predictive analytics to improve the flow of goods through their network and make themselves into a more reliable carrier. “Information is just as important as the package,” Mr. Krishnasamy asserted. “We have always been good at capturing data. Now it is in a big data infrastructure” and they can find connections between data that may look unconnected.

This predictive intelligence is particularly important for high value packages that must be delivered quickly. A case in point is the FedEx Surround solution. FedEx Surround is based on proactive monitoring and intervention controls across a delivery network. FedEx Surround predicts shipment success by combining information about a package with external data such as weather to manage the risks surrounding the shipping process. Shipment data includes scans, shipment route, conveyance and SenseAware ID, a small Bluetooth tracking sensor that can be placed on a package. This allows a white glove service team to monitor the location of a package and take action if it looks like the package will not arrive on time. For example, an intervention might consist of a team scooping up the packages at risk at a sort center and putting them in a van that will leave immediately. But, from origin to destination, FedEx asserts, there are multiple intervention points.

FedEx Surround's first use was in tracking critical, sensitive shipments of COVID-19 vaccines as they moved from manufacturers and distributors to medical centers across the U.S. In the first year of COVID-19 vaccine distribution, FedEx delivered approximately 300 million doses throughout the U.S. with the help of predictive analytic tools. The vaccine shipments move through the FedEx network with an average transit time of less than 20 hours. The tracking devices, combined with the white globe teams monitoring the shipments, allowed for proactive interventions that led to a 99.91 success rate on getting vaccines delivered on the day of commit. View More