October 1998 | Case Studies | I.T. Toolkit

FedEx APIs Create Cinderella Success Stories

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FedEx's ShipAPI leverages the internet, eliminating order errors and the need for middleman distribution.

Once there was a wise visionary who lived in a garden of roses, hyacinths, lilies, and tulips. The flowering delicacies were desired by people the world over, but it was difficult to move the fragile blossoms from the garden to thousands of destinations. It seemed that only kings and queens (or maybe the court jester on special occasions such as Valentines Day) could pay enough gold to have the flowers picked and delivered.

There were many attempts to deliver bouquets. Large beasts of burden carried great quantities to local markets and swift pigeons made special passages at extravagant expense. But still, the blossoms faded and fell soon after making the tiresome journeys. Then, the wise visionary learned of a wondrous crystal globe that enabled anyone in the world to preview and pick his beautiful flowers. All he needed was someone to deliver the flowers quickly - within 24 hours of being picked.

He asked all the beasts of burden and all the high-flying birds to tell him how they might perform the service. Only one flock responded. "We will look into the crystal globe with you and pull its magic out, then we can deliver flowers the day after they are picked." And together, they began to deliver fresh-picked flowers in record time, at record savings, all across the continent.

None of us works in a fairy tale. But the Cinderella success and rapid growth of FTD's competitive Internet nightmare is a dream come true for Bill Strauss, president of Proflowers.com, La Jolla, Calif. Two factors that constrained growth in the flower industry, where the per capita U.S. consumption is a quarter of the European consumption rate, were the price and the vase life of the product. Typically, flowers move from the grower to a distributor to a retailer - with cost added at each transaction and valuable time eroding between picking and consumption by the end user.

"We needed to rethink traditional distribution and fulfillment channels," says Strauss. "We wanted to leverage the Internet to make deliveries faster and cheaper. Federal Express Corp. (FedEx) put together a team to help us develop that capability. Its FedEx ShipAPI has literally eliminated the chance of order error and the need for middleman distribution; we ship direct from the growers to the end users."

The public-key encryption technology of FedEx ShipAPI allows customers to seamlessly integrate FedEx's shipping and tracking functionality into an Internet-enabled service. Customers place orders direct from the Proflowers' web site, keying all order information themselves. Neither Proflowers nor its supplying growers have to enter any data.

A label, which is generated from the purchaser's online order entry, is faxed via the Internet by a Proflowers.com fax server to the grower who processes the order, prints a hard copy of the label, and places it in the plastic shipping sleeve for the FedEx pickup. The system automatically confirms the order's receipt, shipment, and delivery via e-mail to the Proflowers' customer. If more tracking is necessary, the customer can return to Proflowers' web site and monitor the order's delivery throughout the cycle.

"This is perfect execution of supply chain management," says Strauss. "There are no limits on our distribution and fulfillment capabilities because we can scale up to the degree that FedEx can deliver. Since going live for Mother's Day deliveries, we've shipped thousands of orders. We're growing at 25 percent per week."

Thousands of direct marketers have leveraged the FedEx brand because its proven reputation enhances response rates while the timely deliveries diminish buyer's remorse, lowering the level of returns. With about two thirds of its three million daily shipments processed electronically, and more than one million customers operating online, introducing Internet-based Application Programming Interfaces (APIs) to facilitate supply chain management was a logical extension of the FedEx platform.

Flip Sides of the Same Coin

"We're talking about flip sides of the same coin - you can't do logistics and supply chain management without IT and electronic commerce," explains Mike Janes, vice president, electronic commerce and logistics marketing at Federal Express, Memphis, Tenn. "We can automate the processes but the reality is that most businesses are selling a product. And at some point, you have to put that product into a box. The APIs simplify shipment preparation and facilitate tracking because they allow our knowledge and capabilities to reside in customer systems."

In addition to FedEx ShipAPI, FedEx has introduced FedEx TrackAPI and FedEx intraNetShip. All are beta developer tools that can be downloaded free from www.fedex.com/us. Any company can access and use the tools; the only restriction is that companies may not resell the tools.

While FedEx ShipAPI and FedEx TrackAPI offer obvious benefits for real-time tracking and inbound logistics management without the cost and trauma of building and integrating an internal system, FedEx intraNetShip provides a complete software package that empowers customers to ship direct from any desktop. The package allows information to run faster inside a company's firewall, while promoting simultaneous centralized and decentralized operations.

Although employees with Internet access have the ability to ship and track FedEx from their desks, the gatekeepers in the mailroom or docks do not forfeit any control - their capabilities for analyzing express activity are enhanced by the system's reporting features. Inefficiencies, such as replicated address books, are also minimized. For critical shipments that need to be monitored coming and going, the ship alert feature notifies the recipient that the package is inbound; the sender can also copy other associates who need to stay abreast of the progress. With the assigned airbill number, anyone can track the shipment from beginning to end. For companies relying on JIT components, this is particularly efficient because every department can monitor the shipment in real time without bothersome phone queries.

"Our API solutions are designed to give global visibility and access across the supply chain, from manufacturing to customer service to invoicing," says Janes. "We've managed to wipe out those irritating WISMO (Where Is My Order) calls because we've seamlessly linked our customer to their customer. Also, the old 'we never got it' argument for not paying invoices promptly is totally refuted by our tracking and proof of delivery mechanisms."

As the Internet encapsulates our world in a crystal globe, APIs such as those being introduced by FedEx leverage the knowledge and capabilities of massive legacy systems for efficient supply chain management and improved logistics in businesses of all sizes.

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