FedEx Corp. in February plans to start deploying new custom-built handheld devices to its 40,000 FedEx Express couriers as part of a US$150 million investment that the company expects to yield savings of about $20 million per year.
Memphis-based FedEx last week said that it has selected Motorola Inc. to develop and manufacture the FedEx PowerPad handhelds, which will use Microsoft Corp.’s Pocket PC operating system and automate courier dispatch, pickup and delivery operations.
Ken Pasley, director of wireless systems development at FedEx, described the PowerPad as an “industrial-strength” version of commercial Pocket PC hardware. He added that the bulk of the expected cost savings will result from the elimination of paperwork now done by the couriers at FedEx Express, the company’s flagship package-delivery service.
The couriers pick up and deliver a total of 3.5 million packages per day, and PowerPad is designed to save 10 seconds at each stop, Pasley said. FedEx is now testing the device and expects to complete the rollout over 18 months.
The company’s couriers currently use a low-memory store-and-forward device called the Super Tracker that FedEx also developed with help from Schaumburg, Ill.-based Motorola.
Unlike the Super Tracker, the PowerPad will be able to exchange data with FedEx’s back-end systems, including its Web-based package-tracking application, over AT&T Wireless Services Inc.’s nationwide mobile data network.
FedEx in March disclosed that it had signed a five-year deal to use the General Packet Radio Service (GPRS) network operated by Redmond, Wash.-based AT&T Wireless. Pasley said the $150 million investment covers the contracts with both Motorola and AT&T Wireless.
The PowerPad will also include support for Bluetooth short-range wireless communications so that couriers can print shipping labels on Bluetooth-equipped laser printers. In addition, the new device will feature a bar code scanner for reading package labels. Pasley said that FedEx also wants Motorola to incorporate 802.11b wireless LAN capabilities into the PowerPad as soon as possible. That technology is widely used in FedEx’s delivery hubs to scan packages.
Craig Mathias, an analyst at Farpoint Group in Ashland, Mass., said FedEx could gain “a psychic victory” by rolling out its new handheld technology ahead of a similar move that’s planned by rival United Parcel Service Inc.
Susan Rosenberg, a spokeswoman for Atlanta-based UPS, said the company will release details on its new driver terminal next quarter, adding that the device “will incorporate definite physical and technology changes.” In April, UPS said the handheld would be made by Symbol Technologies Inc. and run Microsoft’s Windows CE operating system.
Symbol also competed for the PowerPad contract. Mark Stanton, vice president of logistics marketing at Symbol, said the Holtsville, N.Y.-based vendor continues to have business relationships with other divisions at FedEx, such as its FedEx Ground unit.
– Reporter Linda Rosencrance contributed to this story.