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FedEx Bets on Automation as It Prepares to Fend Off Uber and Amazon

The shipping giant is investing in autonomous trucks, and is interested in delivery robots and an Alexa app.
February 3, 2017

When it absolutely, positively has to be there overnight, your FedEx package might someday be delivered by a robot.

Rob Carter, FedEx’s chief information officer, says the shipping giant is considering small vehicles that could drive around neighborhoods and make deliveries without human drivers.

Carter is responsible for setting the technology agenda across FedEx’s various operating companies, including its planes-and-trucks Express shipping service and office-and-home Ground delivery service, which operate in 220 countries. He recently told MIT Technology Review about some of FedEx’s emerging technology initiatives in artificial intelligence and robotics. The investments FedEx makes in these technologies could shape the multi-trillion-dollar logistics market, affecting everything from the way people send and receive parcels to the global movement of large fleets of vehicles.

For example, someday you might be able to initiate a FedEx shipment by talking to your Amazon Echo or Google Home virtual assistant device. Carter says that FedEx has created an AI-enabled Alexa app that would eventually understand commands like “Alexa, prepare a shipment.”

“You [will be able to] just talk your way through and [Alexa will] ask the right questions to make sure you’ve completed the work and then you can expect a truck to roll up to the front door of your office, pick up the shipments, and move them along,” he explains. By eliminating the tedium of filling out forms and searching through menus, the app could streamline the shipping process and boost customer satisfaction. It is still in an early development stage.

FedEx is also researching ways it could further automate the way it transports packages. Carter says the company is working with the startup Peloton Technology, whose semi-autonomous technology electronically links trucks into small caravan groups called platoons. The system, which uses wireless vehicle-to-vehicle communication to enable the driver of a lead truck to control the gas and brakes of a truck following closely behind him, is designed to reduce wind resistance and save fuel. The technology is considered a significant step toward fully autonomous trucks, and Peloton has said it will release it in late 2017.

Carter says FedEx is also “very much interested in” completely autonomous trucking and has partnered with several automakers that specialize in that technology, including Daimler and its Freightliner truck division and Volvo. Daimler has piloted semi-autonomous trucks on highways in Nevada and Germany while Volvo recently demonstrated a fully autonomous construction truck in an underground Swedish mine. Carter says he expects to see “significant implementations” of automated vehicles in the shipping industry within 10 years, but declined to specify when FedEx might adopt semi- or fully autonomous trucks.

FedEx is considering automating package delivery to some extent, but not via conventional drones, or at least not anytime soon. Carter describes himself as “an avid drone hobbyist,” but says delivery-oriented models  have “pretty limited capacity” since most can’t lift objects heavier than five pounds or fly farther than 50 miles. He also cites as barriers the challenge of winning approval to operate drones in densely populated areas and ensuring that the devices don’t injure children or pets that approach them.

Carter thinks fixed-wing drones that travel set distances, from specific departure and receiving points, could be feasible for commercial deliveries, but overall he favors rolling robots to flying ones. He notes that rolling a vehicle to a destination is generally far more energy-efficient than levitating one. And since people are already accustomed to postal workers coming to their homes and businesses and placing mail in pre-defined receptacles, future FedEx courier robots could drop off parcels in a similar way.

Investing in future technologies, no matter how promising, isn’t likely to fend off critiques that FedEx is lagging upstarts like Amazon and Uber, which separately launched drone-powered deliveries and self-driving tractor trailers in recent months. UPS, FedEx’s main competitor, has also been publicly testing drone-powered parcel delivery since September 2016. Technavio analyst Bharath Kanniappan thinks that FedEx is falling behind its competitors in terms of implementing robots into its delivery system. However, he says, the company’s delay likely stems from a desire to ensure it can continue to deliver packages “with utmost care,” which he notes is the company’s “unique selling proposition,” given its reputation as an express shipper.

Satish Jindel, who heads the transport and logistics consultancy SJ Consulting Group, thinks that FedEx is making the right bets for a closely scrutinized public company. “They are focused and deploying technology in areas where they see a payoff from a cost point of view,” says Jindel, pointing out that FedEx’s shareholders expect the company to generate profits, whereas Amazon’s shareholders accept the company’s expensive risks.

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