FedEx connects global networks for battery and semiconductor supply
FedEx is investing in technology and talent for specialised services to move delicate and dangerous automotive goods across global borders, while meeting priorities of speed, compliance, visibility and safety.
Automotive LogisticsAutomotiveLogistics
PublishedModified
3 min
FedEx is the world’s largest all-cargo airline providing end-to-end transport for dangerous goods and hazardous materialFedEx
PARTNER CONTENT
This article was produced by Automotive Logistics in partnership with FedEx
In the wake of Covid-19 and the consequent semiconductor shortage, carmakers were looking for ways to control volatility, uncertainty, complexity and ambiguity in their supply chains. One adaptation strategy in the automotive sector was tighter supply integration of suppliers, with dedicated long-term contracts for semiconductors.
Tighter integration has continued as carmakers work to secure their battery supply chains in the face of volatile EV sales. While some carmakers with vested interests in tighter battery supply are also looking at repurposing battery capacity for the energy storage market, commitment to battery EV production and connected vehicle development continues.
Logistics providers need to support semiconductor and battery supply chains with specialised end-to-end services that are often cross-border. FedEx is managing the just-in-time delivery of sensitive materials and products with transparency and proactive flexibility.
Logistics legacy
FedEx has 50 years of experience navigating supply chain disruption, with a strong track record of using technology and innovation to anticipate volatility, build resilience and create smarter global supply chains for customers and businesses alike. It provides specialised services for both semiconductor and EV batteries, and often for the same customer, given that EVs can require two to three times more semiconductors than vehicles with internal combustion engines.
FedEx has tailored its logistics solutions to meet with each industry’s specific needs, beginning with protection from a variety of potential environmental and physical impactsFedEx
The company is orchestrating complex regional networks that link semiconductor fabrication plants, testing and packaging facilities, and vehicle assembly lines.
One example is with a multinational semiconductor company, with which FedEx has partnered to input digital intelligence into global chip distribution. It is deploying tools such as FedEx Surround, FedEx Visibility Insights and FedEx Sustainability Insights to improve recovery rates for the company’s on-time shipments by 27% and reduce overall transit times by 16%.
FedEx is also providing guidance on and handling of large-scale EV battery transport and export. FedEx’s cross-border and dangerous goods experts were able to help one German luxury carmaker synchronise high-frequency imports into Asia from Europe of high-risk components, including lithium batteries. Using FedEx, the carmaker was able to avoid compliance delays and keep production lines moving in line with its just-in-time manufacturing priorities as well as expanding localisation.
The transport of sensitive materials such as semiconductor chips and batteries presents a unique set of challenges for logistics providers. According to Rakesh Puri, vice-president of marketing (global verticals), at FedEx, these high-value and, in some cases hazardous items, require meticulous handling and regulatory compliance.
FedEx's suite of specialised services for automotive
Specialised Freight – Options include FedEx Customised Freight, a high-tier air freight service designed for shipments that require more than just standard transport.
Dangerous Goods – FedEx is the world’s largest all-cargo airline providing end-to-end transport for dangerous goods and hazardous materials, such as lithium batteries, across more than 80 countries.
Temperature-Controlled – The packaging of semiconductors is a highly specialised process because these components are susceptible to electrostatic discharge (ESD), moisture, and micro-vibrations. FedEx understands not just the specialised packaging but also the specialised transit environments to prevent heat-related damage to sensitive semiconductor wafers and finished chips. FedEx can integrate technology directly into the packaging and transit process to ensure high quality standards are maintained through FedEx SenseAware.
Customs and Brokerage – FedEx offers assistance with import permits, licences and regulatory compliance directly related to automotive tech components.
Digital tools
FedEx has invested in digital technology to maintain transparency, tracking and security for the delivery of sensitive and dangerous goods. It is using AI to identify risks before they materialise, whether from extreme weather events, geopolitical shifts or capacity constraints. With those tools FedEx can act in advance to mitigate their impact.
“Through digital tools like FedEx Surround, we leverage near real-time data and advanced analytics to identify at-risk shipments before issues escalate,” explained Puri. “For high- value, temperature-sensitive goods, such as semiconductors, FedEx SenseAware combines IoT and AI to monitor location, temperature, humidity and other environmental factors.”
With those tools FedEx can build in intervention hours, or even days, before failure points emerge, playing a critical role in maintaining reliability and security. Given that the company moves 18 million shipments a and generates two petabytes of operational data on a daily basis it is about more than visibility, according to Puri – it is about decision velocity.
“We integrate technology with data from our network that continuously models routes, weather, and demand scenarios, allowing us to re-route shipments and allocate capacity ahead of constraints,” said Puri.
The advantage is how deeply the technology is embedded into the network, enabling FedEx to convert data into action early enough for disruption to be absorbed within the system before the customer ever feels it.
FedEx is managing the just-in-time delivery of sensitive materials and products with transparency and proactive flexibilityFedEx
Team training
As mentioned, FedEx is a world leader in the transport of dangerous goods and has specialists on staff to assist with dangerous goods questions. Puri said it is very important that each person engaged in the transport of hazardous materials has the proper training and is thoroughly familiar with the regulations.
“FedEx provides rigorous trainings and seminars designed to help professionals responsible for compliance with domestic or international dangerous goods shipping regulations to meet these qualification requirements,” noted Puri. “Shipping hazardous automotive materials, especially lithium-ion batteries, requires rigorous expertise. We maintain a global network of dedicated dangerous goods experts who possess specialised, up-to-date knowledge of rapidly shifting international regulations.”
In that way, FedEx continues to leverage extensive cross-border data to help customers adapt quickly to changing market conditions.
