Parcel delivery giant FedEx Corp. has agreed to buy an ownership stake in the logistics technology vendor Berkshire Grey as part of a multi-year deal to stock its fulfillment centers with the tech firm’s robotic order fulfillment systems.
Under terms of the deal, Memphis-based FedEx could buy 25 million shares of Berkshire Grey stock after it orders or pays for at least $200 million of Berkshire Grey’s artificial intelligence (AI)-enabled robotic automation goods and services, Bedford, Massachusetts-based Berkshire Grey said. Based on the stock’s value after today’s announcement, that would represent a $61 million purchase worth about 10% of the company.
The move could show good timing for FedEx. Founded in 2013, Berkshire Grey went public in 2021 by merging with a special purpose acquisition company (SPAC), a financial maneuver that lets private companies list their stock much faster than going through the formal process for an initial public offering (IPO). Since that time, Berkshire Grey’s stock has dropped 77% from an initial posting of $10.81 to $2.39 after today’s announcement. By comparison, the NASDAQ composite index has dropped 12% over the same time period.
According to the company, adding more robotics to its operations could help improve the safety and efficiency of FedEx package handling operations globally. “Our growing relationship with Berkshire Grey for robotic automation is a direct response to the growth of e-commerce, which has accelerated the demand for reliable automated solutions throughout all stages of the supply chain,” Rebecca Yeung, FedEx’ Corporate VP of Operations Science and Advanced Technology, said in a release. “FedEx believes that continued innovation and automation will improve efficiency, productivity and safety for its team members as they continue to keep the global supply chain moving.”
The deal extends an existing relationship between the two companies. FedEx in 2021 began to deploy Berkshire Grey’s Robotic Product Sortation and Identification (RPSi) systems to robotically sort small packages that arrive daily and require distribution. Those systems are now installed at eight sortation facilities—including Queens, NY, Las Vegas, Nev., and Columbus, Ohio—with plans for additional rollouts over the next 12 months.
Berkshire Grey and @FedEx have entered into an agreement for new development activities that will provide broader #AI #RoboticAutomation capabilities to help improve the safety and efficiency of FedEx #PackageHandling operations globally: https://t.co/enYvopQGLl pic.twitter.com/QbpZT2GhtP— Berkshire Grey (@BerkshireGrey) August 2, 2022
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