How FedEx Is Using AI to Make Deliveries Smarter

FedEx, one of the world's largest delivery companies, is using artificial intelligence to make shipping faster, cheaper, and more reliable. The company's Asia-Pacific president, Salil Chari, says that simply delivering packages on time is no longer enough. To stay ahead, FedEx is building smarter supply chains using new technology and data. These changes come at a time when global trade has been shaken up by tariffs, conflicts, and other big disruptions.

Over the past year, trade around the world has become more complicated. In 2025, U.S. President Donald Trump placed tariffs — extra fees — on goods coming from many countries. He also ended a rule that had let small packages worth $800 or less enter the U.S. without paying taxes. This made shipping small items to the U.S. much more expensive, especially for sellers in Asia and China. Businesses had to quickly find new ways to ship their products without losing too much money.

Europe also made big changes around the same time. The European Union removed a tax-free rule for cheap imports from China starting July 1. Small shipments now face a €3 fee per item type. These sudden changes forced companies all over the world to rethink how they moved their goods, and FedEx had to adapt quickly to help its customers keep up.

To deal with the new rules, many online retailers changed how they sold their products. Instead of shipping directly to customers, they started selling through other businesses to lower their costs. FedEx helped by acting as a go-between, clearing goods at lower wholesale prices. The company's chatbot also helped customers figure out shipping costs and stay updated on customs rules.

As trade within Asia and between Asia and Europe grew, FedEx added more flights between the two regions. It also expanded routes within Asia, including from its hub in Guangzhou, China, to cities like Penang and Bangkok. Singapore remains a key hub for FedEx, with about 60 flights a week going in and out of the city. Chari says Singapore's strong air and sea connections make it very important for the region, even if it doesn't have a lot of land or factories.

FedEx also faced challenges when a conflict in the Middle East began in February and blocked an important shipping route called the Strait of Hormuz. When airports in the region closed, FedEx rerouted its flights through Europe to reach their destinations. Chari says staying flexible was the key to keeping deliveries moving. Even when manufacturers could not keep up, FedEx made sure its supply chains kept running.

On the technology side, FedEx is putting a lot of effort into using AI to improve its operations. One tool, called FedEx Surround, gives customers nearly real-time updates on where their packages are. It can even warn customers ahead of time if bad weather might cause a delay. This is especially important for hospitals and healthcare providers, where a late delivery could affect a patient's surgery or treatment.

AI is also helping FedEx cut unnecessary costs. For example, if a hospital is waiting for a spare part for an MRI machine, a delay could mean a repair technician is kept waiting on-site for nothing. With FedEx Surround, the hospital can learn about the delay early and adjust its plans. Customers can even use FedEx's data to reduce their carbon footprint — the amount of pollution their shipping creates.

Robots are also part of FedEx's AI push. At its cargo facility in Singapore's Changi Airport, a robotic arm powered by AI sorts packages at a rate of 1,000 per hour, handling items up to 5 kilograms with 98 percent accuracy. In July 2025, FedEx teamed up with a Singapore robotics company called QuikBot to help with last-mile deliveries — the final step of getting a package to someone's door. These tools are making the whole delivery process faster and more precise.

FedEx employs more than 28,000 people across Asia-Pacific, including about 1,100 in Singapore. Chari says AI will make workers more efficient and allow them to handle harder, more complex tasks. He says it's hard to predict whether AI will lead to job cuts, but as the company grows more productive, it may not need to hire as many new workers. Chari believes FedEx's biggest advantage is combining its massive 50-year-old physical network with smart data and AI tools — a mix he says will be very hard for competitors to copy.