FedEx: New courier system will save $20M annually

FedEx Corp. will start deploying new handheld devices next year to its 40,000 FedEx Express couriers in a $150 million project that should save the company about $20 million per year, according to Ken Pasley, director of wireless systems development at FedEx.

Memphis-based FedEx today announced that it has selected Motorola Inc. in Schaumburg, Ill., to develop and manufacture the new handheld device, the FedEx PowerPad.

Pasley described the PowerPad as an "industrial-strength" version of commercial hardware that uses the Microsoft Corp. Pocket PC operating system and will automate dispatch, pickup and delivery. It will also eliminate the paperwork once handled by couriers, which accounts for the bulk of the annual $20 million in savings, Pasley said.

FedEx Express couriers pick up and deliver 3.5 million packages a day and the PowerPad is designed to save 10 seconds at each stop, Pasley added.

The PowerPads will communicate with a back-end FedEx system over a nationwide General Packet Radio Service (GPRS) network that has a data rate of 20K to 40K bit/sec. operated by AT&T Wireless Services Inc. In April, FedEx disclosed that it had signed a five-year deal with Redmond, Wash.-based AT&T Wireless for GPRS, but declined to disclose the cost (see story). Pasley said today that the total value of the contracts with Motorola and AT&T Wireless is $150 million.

The PowerPads will also incorporate Bluetooth short-range communications to allow a courier to print labels over a Bluetooth-equipped laser printer. The PowerPad also features a bar-code scanner to read package labels. Pasley said that FedEx Express also wants Motorola to incorporate 802.11b wireless LAN capabilities, a technology widely used in FedEx hubs to scan packages, into the PowerPad as soon as possible.

The new device will provide couriers with far more capabilities than the Super Tracker it replaces, including ways to improve customer satisfaction, said FedEx. Since the PowerPad is connected to the back-end system, a courier can use it to quickly correct bad ZIP codes on package labels as well as check weather at a destination city that could possibly delay delivery times.

FedEx is currently testing the PowerPad and expects deliveries to start in February, with final deployment within 18 months, Pasley said.

Symbol Technologies Inc. in Holtsville, N.Y., also competed for the FedEx PowerPad contract. Ken Dulaney, an analyst at Gartner Inc. in Stamford, Conn., called the loss of the contract a "mild blow" for Symbol, whose competing handhelds are used by FedEx Ground. Mark Stanton, vice president of logistics marketing at Symbol, said the company does a lot of business with FedEx and has a continuing relationship with other divisions in the company.

Craig Mathias, an analyst at Farpoint Group in Ashland, Mass., said FedEx gained a "psychic victory" by rolling out new courier technology ahead of rival United Parcel Service Inc. Susan Rosenberg, a spokeswoman for Atlanta-based UPS, said that her company would release details on its new driver terminal in the first quarter of 2003, adding that it "will incorporate definite physical and technology changes."

Staff writer Linda Rosencrance contributed to this report.

Copyright © 2002 IDG Communications, Inc.

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