Microsoft Corp. and FedEx Corp. today unveiled a multiyear partnership under which the logistics giant will use Microsoft’s Azure cloud service to build a machine learning-powered platform for predicting package delivery delays.

The planned platform, FedEx Surround, is expected to be the first of several new offerings that will emerge from the collaboration. The companies are planning to launch a pilot with select customers this summer.

FedEx Surround is set to target commercial shippers, such as manufacturers that use FedEx’s network to ferry goods to retailers, and will use Azure’s artificial intelligence services to predict potential delivery delays. A home appliance maker, for instance, could receive an alert if a truck carrying refrigerators is at risk of getting held up by a traffic jam or snow. Supply managers can then use this information to redirect the shipment to a more favorable route.

In addition to anticipating shipping delays, FedEx Surround will provide more transparent package tracking. Microsoft and FedEx said in a joint announcement that the goal is to provide “near-real-time insights — down to the granular level of ZIP code, for example.”

One use the companies see for this data is helping enterprises sell more of their merchandise. “If you got five pieces of inventory in Ohio and it’s not selling, you’ll know that that inventory is selling in the Bay Area or L.A. and can move the merchandise there,” FedEx Chief Executive Frederick Smith detailed in a joint video with Microsoft counterpart Satya Nadella. The result, Smith said, is that companies can “have a much more efficient and high-turn sales and fulfillment process.”

FedEx also sees FedEx Surround coming handy for organizations making time-sensitive shipments. A medical device manufacturer, as an example, could use the platform to plan ahead for weather events, traffic congestion and other factors that may delay the delivery of important supplies if left unaddressed. 

FedEx Surround is the first in series of solutions being planned. FedEx and Microsoft said that they’re expecting to announce “several” more offerings in the coming months, some of which will also use the Microsoft Dynamics suite of business management applications. 

The deal represents a high-profile customer win for Microsoft’s cloud business and possibly a highly lucrative one as well, depending on how extensively FedEx deploys FedEx Surround across its global delivery network. For FedEx, in turn, offering more digital features to customers could help it become more competitive with customer-turned-rival Amazon.com Inc., with which it severed ties last year.

Some Amazon competitors in the retail sector have also teamed up Microsoft for their cloud projects. Kroger Co., for instance, last year partnered with the company to build an Azure-powered cashierless store system similar to the one powering Amazon’s Amazon Go locations.

Microsoft’s expanding presence in the retail and logistics sector may prove to be a boon for its budding edge computing business. The company could promote its recently introduced Azure Edge Zones, edge systems that can run workloads on-premises in locations such warehouses, to retailers and other firms which already use Azure for their off-premise workloads. 

Image: Microsoft