FedEx launches same-day delivery service with OneRail to compete with Amazon and Walmart

fedex It launches a same-day shipping program with last-mile delivery company OneRail, immediately after Amazon announced that it will begin offering faster shipping times, CNBC has learned exclusively.

The new partnership means customers now have an offer set “by the end of the day,” according to Jason Brenner, senior vice president of digital at FedEx.

“Our value proposition is about speed, reliability and visibility, and we’re always trying to go beyond that value proposition,” Brenner told CNBC.

FedEx is the latest company to join the race of retailers to provide the fastest delivery service and highest levels of convenience to consumers. Amazon announced last week that it would introduce delivery windows of just one to three hours, which retailers love Walmart and goal It has also begun offering express delivery options — partly to keep up with the dominance of Amazon Prime in recent years.

OneRail, a last-mile delivery software company, uses artificial intelligence to improve delivery, routing and tracking of retailers’ deliveries. The company said it covers nearly 99% of the United States and has a network of more than 1,000 delivery drivers, making 80,000 deliveries of 30 minutes or less per day.

Through the new partnership, FedEx will be able to use OneRail technology to allow retailers to offer same-day shipping, in part by leveraging the retailer’s store network. Customers will be able to choose more precise delivery times, including two-hour service and end-of-day service, as well as near real-time tracking.

“We are excited to partner with FedEx,” OneRail CEO Bill Catania told CNBC. “It opens up more capabilities for retailers, allowing them to really own their customers and their data. Now, they have another option, and on the back of the announcement from Amazon earlier this week, I think this is something that retailers will feel is very relevant.”

OneRail will now provide retailers with a rate card, after which these companies can set their own same-day shipping rates based on their value propositions.

“The price of this product will be very competitive,” Catania said. “Retailers and brands [will be] “Able to build a very compelling value proposition to their customers.”

The partnership has been many years in the making, but the companies now feel the “time is right in the market,” Catania said. He stressed that the structure allows retailers to deliver quickly without having to change their infrastructure, which Brenner said is one of the biggest competitive advantages of the new partnership.

“Customers are increasingly demanding faster shipping,” Brenner said. “Same-day supply is an increasingly valuable support that retailers are looking to provide.”

He added that the platform will also have the flexibility for customers to choose specific windows for time-sensitive deliveries such as furniture.

“Other retailers are doing this and building their own capabilities and capabilities to provide same-day service, but it’s very difficult to manage if you string it together yourself,” Brenner said. “It’s very expensive to manage, and it’s also very complex and expensive to scale.”

This announcement comes after Amazon began shorter delivery periods in some parts of the United States to meet increasing customer needs. The company got shoppers hooked on fast shipping when it introduced free two-day delivery alongside its Prime loyalty program in 2005. By 2019, it had made one-day shipping the standard, and in the years since, it has poured money and resources into expanding same-day delivery.

More than 90,000 items qualify for Amazon’s new delivery program, including pantry staples, cleaning supplies, clothing and more. It plans to roll out the faster delivery windows across a wider area of ​​the country after its initial launch.

— CNBC Annie Palmer She contributed to this report.