FedEx to invest in more robotic automation from Berkshire Grey

Transportation and delivery giant FedEx and logistics technology firm Berkshire Grey have announced a deeper partnership in an effort to overhaul the former’s supply chain.

The two companies announced in a blog post they've agreed to work together on improving safety and efficiency throughout FedEx’s package handling system, using so-called robotic automation and artificial intelligence (AI).

Berkshire Grey’s Robotic Product Sortation and Identification (RPSi) systems have already been rolled out across eight FedEx facilities within the United States. This sorts small packages for distribution automatically, a small part of the more holistic approach indicated by today’s announcement.

A master system purchase agreement, which would help speed up purchases from Berkshire Grey, is being drafted and both parties hope to execute it before the year is out. The agreement implies that, once formalised, FedEx is serious about overhauling its backend to embrace automation wholescale.

Moreover, Berkshire Grey has allowed FedEx to purchase incrementally-vested public stock, to a maximum of 25 million shares available. This number is subject to FedEx purchasing ordering at least $200 million in Berkshire Grey services and products by December 31 2025.

FedEx has engaged in a series of partnerships to facilitate its digital transformation and promote efficiency within its internal systems. In January, it announced that in a continuation of its dealings with Microsoft, it would be utilising the tech giant’s Dynamics 365 software to improve order logistics using the power of cloud networking.

On its website, Berkshire Grey claims that its package sortation systems can “reduce shipping costs by up to 20% and improve sorter utilization by up to 50%”.

It identifies key areas of streamlining such as sorting parcels by zone to reduce freight costs, auto-identifying barcodes without need for manual handling and picking individual items to be sorted to cut down on labor.

Amazon has long been an outlier in its reliance on automation within its warehouse back-end, and recently announced a new generation of fully-autonomous robots to work in even more areas across its fulfilment centres.

“Berkshire Grey and FedEx are strategically aligned. These new agreements reflect our mutual commitment to innovations in robotic automation that can remove barriers within the supply chain, ease the physical burden on employees and streamline operations,” stated Tom Wagner, CEO of Berkshire Grey.

“We look forward to working together on this new program and to advancing other automation programs with FedEx moving forward.”